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Products as Network: An Empirical Approximation of the Manufacturing Production Network in Indonesia

Massie, Natanael Waraney Gerald and Mangunsong, Carlos (2022): Products as Network: An Empirical Approximation of the Manufacturing Production Network in Indonesia.

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Abstract

This study aims to characterise and represent the Indonesian manufacturing sector as a production network. We specifically define any relationship between any two products in the network as a relationship that one product is used as input to produce the other, akin to the input-output models but in a much-disaggregated level of 10-digit product level. This study utilises the Indonesian annual survey of manufacturing firms, specifically the 2017 data, to construct a product-level network of industries. Using the constructed network, this study discusses which products and sectors in the Indonesian manufacturing sector are more well-connected to others, using different centrality measures commonly discussed in network theory. We find that, generally, low-to-medium technology products are the more central products in Indonesian manufacturing. We also compare our framework with other well-established product network frameworks and discuss possible further works using our framework.

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