Small- and Medium-Size Linkages with Large Firms: Revisiting Studies on Indonesian Manufacturing

Under President Jokowi, small and medium firms in manufacturing have been emphasized for their role in enhancing equality and quality of life, as detailed in the Nawacita economic platform. The administration’s approach, rooted in Law no. 27/2007, promotes broad-based economic growth with significant focus on intersectoral relationships, recognizing small and medium enterprises as crucial to the manufacturing “value chain.” Plans involve strengthening the value chain through diversification and vertical integration. Infrastructure, notably the trans-Java toll road, connects these firms to urban markets. Amidst global disruptions like COVID-19, the focus has been on creating an enabling environment for businesses, with programs like MEKAR and KUR assisting them. The 2022 PEN budget heavily favors small firms. The paper revisits Kuncoro’s 2014 research, exploring the relationship between small-medium and large firms in Indonesia using 2014–2019 data.