Impacts of Aid-Funded Technical Assistance Programs: Firm-Level Evidence from the Indonesian Foundry Industry

SummaryThis study examines the effect of Japanese aid-funded technical assistance programs on the Indonesian foundry industry funded, applying difference-in-differences propensity score matching estimation to a unique firm-level dataset. The major finding is that the average effect of the aid programs on the change in the reject ratio is negative and significant, suggesting that these programs help local participant firms improve their technology. However, technical assistance programs provided by the local counterpart of aid after the completion of the aid programs do not seem to improve technology of participants in the short run on average.