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Does Efficiency Convergence of Economy Promote Total Factor Productivity? A Case of Indonesia

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  • Rudi Purwono (a) and Mohammad Zeqi Yasin (b)

    ((a) Universitas Airlangga, Indonesia; (b) Research Institute of Socio-Economic Development (RISED), Indonesia)

Abstract

This study investigates the relation between the efficiency converging moment and Total Factor Productivity of Indonesia’s economy. The intriguing finding is that although efficiency convergence was speeding towards the frontier as well as the catching-up patterns, the finding showed a negative productivity at a nearly zero level. Particularly, the negative productivities were mostly exhibited by Indonesia’s eastern regions. Technical Change that experienced a statistical downturn seemed to have discouraged this productivity. Variables such as investment might have played a significant role in this case. This study recommends making regulations on investment spending in each province, so that regional productivities can be improved.

Suggested Citation

  • Rudi Purwono (a) and Mohammad Zeqi Yasin (b), 2020. "Does Efficiency Convergence of Economy Promote Total Factor Productivity? A Case of Indonesia," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 45(4), pages 69-91, December.
    • Handle: RePEc:jed:journl:v:45:y:2020:i:4:p:69-91
    DOI: 10.35866/caujed.2020.45.4.004
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    References listed on IDEAS

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    Cited by:

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    2. Yunwei Li & Wenjing Long & Xiao Ning & Yumeng Zhu & Yifan Guo & Zhou Huang & Yu Hao, 2022. "How can China's sustainable development be damaged in consequence of financial misallocation? Analysis from the perspective of regional innovation capability," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3649-3668, November.

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    More about this item

    Keywords

    Efficiency; Convergence; Total Factor Productivity;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other

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