Technical efficiency and embodied technical change in the Indonesian pulp and paper industry (original) (raw)

THE MICRO-DYNAMICS OF CATCH-UP IN INDONESIAN PAPER MANUFACTURING

Review of Income and Wealth, 2011

In this study we analyze the micro-dynamics of catch-up in Indonesian paper manufacturing, using a two-country plant-level dataset for the period 1975-97. We apply data envelopment analysis (DEA) to measure to what extent Indonesian paper mills are catching up with Finnish mills in terms of technical efficiency. Three questions are addressed: What is the distribution of Indonesian plant technical efficiency vis-à-vis the technological frontier? What is the role of entry, exit, and survival in Indonesia for catch-up in the paper industry as a whole? In what ways do catching-up plants in Indonesia differ from non-catching-up plants? We find that on average the Indonesian paper industry moved closer to the technological frontier during the 1990s. However, catch-up has been a highly localized process in which only a few large establishments have achieved near best-practice performance, while most other plants have stayed behind.

Technical Efficiency of the Malaysian Wooden Furniture Industry: A Stochastic Frontier Production Approach

International Business Research, 2010

Wood furniture industry is an important component in our manufacturing sector for it significantly contributes to the industrialization of Malaysia’s economy. Evaluating wood furniture industry’s level of efficiency is important to assist and provide a relative direction to small and medium firms on their business. The objective of this research is to examine the efficiency of wooden furniture industry by determining the technical efficiency using stochastic frontier production model. Results show that firm output is 54 per cent less than the maximal output which can be achieved from the existing inputs. The technical inefficiency on individual firm varies from 1.63 to 94.69 per cent and so does the potential to increase firm output from the existing inputs. This evidence suggests that many firms still operate below the efficiency level, confirming the conventional view that labor-intensive firms are most likely inefficient.

Efficiency and Productivity Analysis of Indonesian Pulp and Paper Industry Year 2005 – 2009

International Symposium on Resource Efficiency in Pulp and Paper Technology, Bandung, November 20-22, 2012, pp : 192-198, 2012

Pulp and paper industry is one of developing-industries in Indonesia. But the industry still faces issues, such as shortage of pulpwoods and waste papers, deterioration of machines performance in old mills, and others that may affect performance of Indonesian pulp and paper industry.This research aims to determine the technical efficiency and productivity level (as performance indicators) of Indonesian pulp and paper industry, and to determine the factors that may affect the efficiency and productivity. This study use firm-level panel data of large and medium industries survey by Central Bureau of Statistics (BPS) year 2005 to 2009. The Analysis is carried out in two stages. Firstly, estimating technical efficiency of firms in using their resources by Data Evelopment Analysis (DEA) method. While productivity level calculated by Total Factor Productivy (TFP) Malmquist index, and subsequently decomposed into two components : efficiency change and technological change. Secondly, determining the factors that may affect efficiency and productivity by fixed-effect data panel regression method. The empirical results show the overall average of technical efficiency in range 71% to 79%. Averagely productivity change is slightly increased and driven by technical change rather than technical efficiency. The efficiency is negatively affected by amount of employees, firm age, and import. While productivity is positively affected by wage and technical progress, and negatively affected by firm age and market concentration. Suggestions that implicate to policies are also made for development of Indonesian pulp and paper industry. Key words : Efficiency ; productivity ; Indonesian pulp and paper industry ; DEA ; TFP Malmquist

Industrial Policy and Technology Diffusion: Evidence from Paper Making Machinery in Indonesia

World Development, 2006

In this paper, we analyze the diffusion and adoption of paper making machinery in the Indonesian pulp and paper industry, from 1923 till 2000. We develop a machine level index of technological sophistication (mach), which measures the technological distance of each paper machine to the world technological frontier. The data reveal a pattern of rapid technological catch up. But catch up was not an industrywide phenomenon. Some modern firms installed state-of-the-art machinery, while others installed older vintages. The paper argues that industrial policy has played an important role in the speed and nature of diffusion of paper making machinery.

Rapid Growth with Limited Learning: Industrial Policy and Indonesia's Pulp and Paper Industry

Oxford Development Studies, 2007

This paper contributes to the debate on the role of technical change and industrial policy in Indonesian economic growth using the pulp and paper industry as a case study. The analysis indicates that industry and trade policies had a positive influence on growth and capital accumulation, but gave Indonesian pulp and paper companies few incentives to create or deepen their technological capabilities, resulting in fragmented and limited technology assimilation. The findings also raise questions about common interpretations of total factor productivity growth in Indonesia in terms of inspiration versus perspiration.

Efficiency and productivity analyses of Indonesian manufacturing industries

Journal of Asian Economics, 2006

This study estimates the technical efficiencies and total factor productivity (TFP) growths in food, textile, chemical and metal products industries from 1993 to 2000 in Indonesia by using the stochastic frontier model. Furthermore, the determinants of inefficiency are also analyzed and TFP growth is decomposed into technological progress, a scale component, and efficiency growth. The results reveal that the food, textile, chemical and metal products sectors are on average 50.79%, 47.89%, 68.65% and 68.91% technically efficient, respectively. It is noted that ownership contributed to technical inefficiencies in the food sector; location and size contributed to technical inefficiencies in the textile sector, whereas size, ownership and age contributed to inefficiencies in the chemical and metal products sectors. We note that productivity in food, textile, and metal products sectors decreased at the rate of 2.73%, 0.26%, and 1.65%, respectively, but increased at a rate of 0.5% in the chemical sector. The decomposition of TFP growth indicates that the growths are driven positively by technical efficiency changes and negatively by technological progress in all four sectors.

Technical efficiency and productivity analysis in Indonesian provincial economies

Applied Economics, 2011

By using the stochastic frontier methodology, this study investigates the technical efficiency and total factor productivity (TFP) growth in Indonesian provincial economies during the period from 1993 to 2000. In addition to the estimation of provincial technical efficiency, factors that contribute to technical inefficiency are also examined and the TFP growth is decomposed into technological progress, the scale component and the change in technical efficiency. The results reveal that average technical efficiency is only around 50%. Our results reveal that the mean years of schooling and sectoral differences affected technical efficiency. The TFP grew, on average, in the range from 1.65% to 5.43% with an average growth of 3.59%. In twenty out of twenty six provinces the TFP growth was driven by efficiency changes while in four provinces the TFP growth was driven by technological progress. Further, we no te that the Asian crisis affected the TFP growth and the western provinces suffered from the crisis more than the eastern provinces.

Technological effort, technological capabilities and economic performance : a case study of the paper manufacturing sector in West Java, Indonesia

Technovation, 2006

Although there is a substantial body of literature on the importance of technological capabilities for economic development, the exact relationships between technological efforts, technological capabilities and economic performance at micro-level still remain unclear. How do technological efforts affect technological capabilities? To what extent and how do improvements in technological capabilities result in better economic performance of firms? This paper aims to develop adequate quantitative measures of machine-level technological effort, technological capabilities and economic performance for the paper industry in West Java, Indonesia. It explores the empirical relationships between these micro-level variables, focusing both on the relationships between efforts and capabilities and between capabilities and economic performance, with a view to deepening our general understanding of the role of capabilities in successful and less successful processes of industrialisation. q

Comparative Analysis of Technological Capability Accumulation Routes in Brazil and Indonesia: The Case of Pulp and Paper Industry

2010

This paper compares the routes of technological capability accumulation and technology diffusion in the pulp and paper industry in Brazil and Indonesia, and evaluates the evolution of these sectors in international trade of hardwood pulp. The competitiveness of these sectors in Chinese, American and German markets is discussed, based on pulp export data to these countries and on observations made in technical visits carried out to paper mills in China, the United States and Europe in the period 2004-2009, as well as on the testimony of officers and employees of these mills. Through the comparison of routes of technological capability accumulation and technology diffusion in the pulp and paper industry in Brazil and Indonesia, and the assessment of their trends in international trade of hardwood pulp, this study identifies the occurrence of structural change in the pattern of international trade in the global industry and indicates determinants of competitiveness for both Brazil and ...

TOTAL FACTOR PRODUCTIVITY IN INDONESIAN MANUFACTURING: A STOCHASTIC FRONTIER APPROACH

This paper examines the patterns of total factor productivity growth (TFP) and technical efficiency changes in Indonesia's manufacturing industries over the period 1988-2000. A stochastic frontier production has been employed to decompose the sources of TFP Growth into technical progress, changes in technical efficiency change and scale economies effect. The analysis takes into consideration the impact of the liberalisation policies and the economic crisis in 1997 as the data is broken down into three subperiods. In addition, the results are also compared to previous estimations for robustness check.