Putu Mahardika Adi Saputra
Utilizing Data Envelopment Analysis (DEA), this paper examines the technical efficiency level of Indonesian manufacturing industries during 1990 to 2001. Our model considers the evolution of 23 main Indonesian manufacturing industries (3-digit ISIC groups) with 74 their sub-industries (4-digit ISIC groups). Specifically, our DEA will refer to the Charnes, Cooper and Rhodes (CCR) model, assumes that the production function exhibits constant returns-to-scale (CRTS). Based on the model, this paper will identify the 'benchmark' (the most efficient) industries, and the less efficient industries that need to be improved. According to the result, we found that there are five Indonesian principal manufacturing industries which are identified as the best performers, namely tobacco (ISIC 314), iron and steel (ISIC 371), transport equipment (ISIC 384), non-ferrous metal (ISIC 372) and industrial chemicals (ISIC 351). In average, industries that are categorized as basic industry tend to perform better than other industries that are categorized as lowtraditional and high-tech industry. However, for last two years, high-tech industries inclined to become more efficient than basic and traditional industries. © EuroJournals Publishing, Inc. 2011.
Faculty of Economics, University of Brawijaya, Malang 65145, Malang Jln. Mayjen Haryono No. 65, Indonesia
