This paper examines the interrelationship between changes in the provincial minimum wage, firms’ export behavior, and firms’ performance in Indonesia. In this regard, we apply a two-stage least squares regression analysis to detailed firm-level data of manufacturing enterprises during 2002–2014. We find that an increase in the minimum wage is associated with a decrease in a firm’s employment and productivity, but increase in its probability of exporting and markup. We also use the 2012 minimum wage reform in Indonesia to conduct a difference-in-difference analysis to further mitigate the potential endogeneity of minimum wage regulation. Our findings are generally robust to alternative estimation methods. Moreover, quantile regression results indicate that the average wage, firm size, and the education level of workers also affect the predictions. Above all, this study suggests that Indonesian exports and the country’s comparative advantage in international markets are not negligibly affected by higher labor costs caused by the growth in the minimum wage.

本文研究了印尼省级最低工资的变化，企业的出口行为与企业绩效之间的相互关系。在这方面，我们将两阶段最小二乘回归分析应用于2002-2014年制造企业的详细公司级数据。我们发现，最低工资的提高与企业就业和生产率的下降有关，但其出口和加价的可能性却增加了。我们还使用2012年印度尼西亚的最低工资改革进行了差异分析，以进一步减轻最低工资监管的潜在内生性。我们的发现通常比其他估算方法更可靠。此外，分位数回归结果表明，平均工资，企业规模和工人的受教育程度也会影响预测。