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The Dynamics of Total Factor Productivity Ofmedium and Large Manufacturing in Indonesia

Author

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  • Gantiah Wuryandani

    (Bank Indonesia)

Abstract

This paper calculates and decomposes the Total Factor Productivity (TFP) for large and medium scale industry in Indonesia covering the period of 2000-2009. By using Data Envelopment Analysis (DEA) method, the result shows there is a shift of the supporting factors on the growth of TFP on manufacturing sector within the 2 (two) sample period. In the period of 2000-2004, efficiency change becomes the main contributor on the growth of TFP. Whereas in the period of 2005-2009, technical change becomes the main supporting factor of TFP,however it goes along with the growth of negative efficiency change or the decline of the company�s catching-up effect ability to adapt with the more advance technology. The grouping of the sample across subsectors, technical change and also efficiency change shows the declining amount of manufacture industry with superior productivity. Furthermore, the number of low and weakening catching-up industry is increasing.

Suggested Citation

  • Gantiah Wuryandani, 2014. "The Dynamics of Total Factor Productivity Ofmedium and Large Manufacturing in Indonesia," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 16(3), pages 259-288, January.
    • Handle: RePEc:idn:journl:v:16:y:2014:i:3i:p:259-288
    DOI: https://doi.org/10.21098/bemp.v16i3.447
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    References listed on IDEAS

    as
    1. Chiang Kao & Shiang-Tai Liu, 2007. "Data Envelopment Analysis With Missing Data," Springer Books, in: Joe Zhu & Wade D. Cook (ed.), Modeling Data Irregularities and Structural Complexities in Data Envelopment Analysis, chapter 0, pages 291-304, Springer.
    2. Timothy J. Coelli & D.S. Prasada Rao & Christopher J. O’Donnell & George E. Battese, 2005. "An Introduction to Efficiency and Productivity Analysis," Springer Books, Springer, edition 0, number 978-0-387-25895-9, August.
    3. Mohamad Ikhsan, 2007. "Total Factor Productivity Growth in Indonesian Manufacturing: A Stochastic Frontier Approach," Global Economic Review, Taylor & Francis Journals, vol. 36(4), pages 321-342.
    4. William W. Cooper & Lawrence M. Seiford & Kaoru Tone, 2007. "Data Envelopment Analysis," Springer Books, Springer, edition 0, number 978-0-387-45283-8, August.
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    Keywords

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    JEL classification:

    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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