Fungsi Produksi Cobb-Douglas Pada industri Semen di Indonesia

This study proves the validity of Cobb-Dougias production function with constant return to scale and Hicks neutral technological change at cement industry in Indonesia during 1970 - 86. The output elasticities of capital and labor are not the same but the first is only about 116 % of the second. Therefore the cement industry in Indonesia has been developed with capital intensive and labor augmenting technical progress. However, actual rate of return on capital is much more greater than its marginal product, reflecting the higher cost of expansion and development of cement industry in Indonesia from social welfare point of view. On the other hand, actual return to labor is lower than the value of its marginal product but increasing every year during the period being studies. Put it differently, the cement industry in Indonesia has not benefited the labor cost comparative advantage which should be enjoyed in the labor market with excess supply of labor. Therefore, the prospect of export of cement is not very good from the Hecksher-Ohiin theory point of view. However. Indonesia should increase the export of cement in order to lower the fixed cost of production per unit through optimaiity the utilized capacity.