Assessment of Indonesia's country risk by Australian manufacturers

Abstract

This paper explores variations in the decision-making mechanisms produced by different levels of experience of Australian manufacturing firms investing or considering investing in Indonesia. Despite a theoretically high expected risk, Australian firms not only remain in Indonesia, but a number of currently domestic firms are considering Indonesia as the first step towards their internationalisation. The results of a series of interviews with a sample of these firms shows that the way the dimensions of risk Indonesia presents are evaluated and the sources of information used differs according to the firms' international experience and level of exposure to the country itself.