KEPEMILIKAN ASING DAN KECENDERUNGAN EKSPOR-IMPOR INDUSTRI MAKANAN OLAHAN INDONESIA

The processed food sector is one of the contributors to Indonesia's non-oil and gas exports. One of the efforts to increase Indonesian processed food products export is by involving foreign parties to invest in the processed food industry. On the other hand, foreign ownership is still debated in Indonesia. Restrictions on foreign ownership are often done to protect domestic companies. This study aims to analyze the impact of foreign ownership on processed food export and raw material import propensity of Indonesia's processed food. The data used are the cross-section data from 2010 and 2015 Large and Medium Industry (IBS) from Statistics Indonesia. The Tobit regression model is utilized in this research. The results show that foreign ownership has a positive effect on processed food export propensity, but the large share of foreign ownership depends on the policies adopted by the government, whether import substitution or export promotion. Foreign ownership also has a positive effect on raw material import propensity. Therefore, to increase exports of processed food, the government needs to encourage foreign investment in the processed food industry. To reduce imports of raw materials by foreign firms is carried out by encouraging the domestic supply of raw materials, which is competitive in price and quality.