SECTORAL VARIATIONS ON TECHNINAL EFFICIENCY AND RETURN_x000D_
TO SCALE IN THE INDONESIAN ECONOMY
Author : Muchdie, Muchdie
Abstrak :
This paper discusses on sectoral variations of technical effciency and return to scale in the Indonesian_x000D_
economy. Employing regression analysis of Cobb-Douglas production function, thesecoefficientswere_x000D_
calculated. Nine economic sectors in the Indonesian economy: Agriculture, Mining and Quarying,_x000D_
Manufacturing, Electricity,Gas and Drinking Water, Construction, Trade, Hotel and Restaurant,_x000D_
Transportation and Communication, Finance, Rental and Corporate Services, and Services, were_x000D_
exercised to study the variation of those coefficiens. Sectoral data on gross domestic product, capital_x000D_
stock and employment are those from the years 1967 to 2007 collected from many documents_x000D_
available at the National Statistics Agency. The result shows that the coeffiecients of technical_x000D_
efficiency do vary among sectors. Those sectors in which the coefficients were above that at the_x000D_
national level, experienced decreasing return to scale. On the contrary, those sectors in which the_x000D_
coeffiecients were below that at national level, experienced increasing return to scale.