On productivity performance gains of Indonesian firms

Viverita, M. Ariff

Research output: Contribution to journalArticleResearchpeer-review

2 Citations (Scopus)

Abstract

Purpose – The purpose of this paper is to develop a methodology to study profit vs non-profit seeking firms usefully to compare corporate performance. It aims to apply the methodology to measure if state vs non-state firms with different objectives are comparable in performance. If relevant, the paper also aims to comment on the applicability of this method to analysis of other firms, e.g. Islamic banks in Indonesia. Design/methodology/approach – The paper applies Malmquist data envelopment analysis method to different classes of firms: state vs non-state firms; aggregated at the industry and at national levels; and develop appropriate time trend analysis as well. Findings – The common belief that all state firms are inefficient is not upheld by test results: in some sectors (agriculture and chemicals) state firms are more efficient than private firms. Efficiency is very low, but did improve over time across all sectors and types of firms particularly before the 1997-1998 and in recent years. Efficiency is mostly achieved through technology adoption (technological change) accounts for most efficiency gains. Research limitations/implications – This study overturns findings of many accounting performance based studies and revisits policy implications. Practical implications – No one policy fits all in Indonesia for privatization programme. Originality/value – The paper provides more valid methodology to compare state firms with non-state firms for the first time.

Original languageEnglish
Pages (from-to)644-659
Number of pages16
JournalManagerial Finance
Volume34
Issue number9
DOIs
Publication statusPublished - 1 Aug 2008

Fingerprint

Productivity
Methodology
Indonesia
Malmquist
Data envelopment analysis
Accounting performance
Efficiency gains
Time trends
Agriculture
Profit
Design methodology
Islamic financial institutions
Technological change
Common belief
Corporate performance
Technology adoption
Policy implications
Private firms
Industry
Privatization

Cite this

Viverita ; Ariff, M. / On productivity performance gains of Indonesian firms. In: Managerial Finance. 2008 ; Vol. 34, No. 9. pp. 644-659.
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On productivity performance gains of Indonesian firms. / Viverita; Ariff, M.

In: Managerial Finance, Vol. 34, No. 9, 01.08.2008, p. 644-659.

Research output: Contribution to journalArticleResearchpeer-review

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