SPATIAL VARIATIONS IN TECHNICAL EFFICIENCY AND RETURN TO SCALE IN THE INDONESIAN ECONOMY

Muchdie, Muchdie (2016) SPATIAL VARIATIONS IN TECHNICAL EFFICIENCY AND RETURN TO SCALE IN THE INDONESIAN ECONOMY. International Journal of Recent Scientific Research, 7 (10). pp. 13625-13629. ISSN 0976-3031

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Abstract

This paper reports an analysis of technical efficiency and returns to scale in the Indonesia economy
during 1983-2013 with special attention to the spatial dimension of the economy. The study focused
on seven group of islands: Sumatera (10 Provinces), Java (6 Provinces), Kalimantan (4 Provinces),
Sulawesi (6 Provinces), Bali-Nusa Tenggara (3 Provinces), and Maluku (2 Provinces) and Papua (2
Provinces). Cobb Douglass production function was employed to calculate technical efficiency and
return to scale using regression analysis. Time series data during 1983-2013 on Gross Regional
Domestic Bruto, Capital Stock, and Employment were collected from many sources at the National
Statistics Agency. The results show that technical efficiency in production varies among regions.
Provinces with coefficients of technical efficiency below that at national level exhibited increasing
return to scale. Otherwise, the Provinces with coefficients of technical efficiency above that at
national level exhibited decreasing return to scale.

Item Type:	Article
Subjects:	H Social Sciences > HB Economic Theory
Depositing User:	admin repository uhamka
Date Deposited:	25 Nov 2016 10:47
Last Modified:	25 Nov 2016 10:47
URI:	http://repository.uhamka.ac.id/id/eprint/129

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