Benchmarking the Efficiency of Indonesian Cooperatives

Posted: 4 Mar 2012

See all articles by Viverita Viverita

Viverita Viverita

Department of Management Faculty of Economics and Business Universitas Indonesia

Sigit S. Wibowo

Universitas Indonesia, Graduate School of Management

Date Written: July 1, 2007

Abstract

This paper aims to introduce an alternative way to benchmark the efficiency of 30 Indonesian cooperatives at the provincial level from 2000 to 2006. A balanced panel data was used to determine the total factor productivity (TFP) and identify the main drivers to technical efficiency. A stochastic frontier analysis (SFA) was used to determine the influence of environmental variable such locations to technical efficiency of the cooperatives. Furthermore, based on this specification the efficiency frontiers are computed using data envelopment analysis (DEA). The efficiency of each cooperative was then ranked and compared to check for consistency. The study found that on average, cooperatives are 19.4 percent away from the production frontier. The panel data allows for the calculation of productivity change based on Malmquist index. Results found that on average, TFP increased by 8 percent during the observation periods which driven much by 13.6 percent increased in innovation.

Keywords: cooperatives, efficiency, total factor productivity, data envelopment analysis, stochastic frontier analysis

JEL Classification: G21, O3

Suggested Citation

Viverita, Viverita and Wibowo, Sigit Sulistiyo, Benchmarking the Efficiency of Indonesian Cooperatives (July 1, 2007). Available at SSRN: https://ssrn.com/abstract=2014783

Viverita Viverita (Contact Author)

Department of Management Faculty of Economics and Business Universitas Indonesia ( email )

Depok, West Java 16424
Indonesia
+62217270164 (Phone)
+622178849155 (Fax)

Sigit Sulistiyo Wibowo

Universitas Indonesia, Graduate School of Management ( email )

Depok, West Java 16424
Indonesia

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