Indonesia's ascent on the technology ladder : capital stock and total factor productivity in Indonesian manufacturing

M.P. Timmer

Research output: Contribution to journalArticleAcademicpeer-review

40 Citations (Scopus)

Abstract

This paper presents new capital stock estimates for mium and large-scale manufacturing in Indonesia using the Perpetual Inventory Method. Capital stock grew gradually during 1975-88, at an annual rate of 7.6%, then boomed during 1989-95 at 13.6% per annum. Growth accounting shows that 60% of the rapid growth of manufacturing output during the period 1975-95 was due to capital input growth, 18% to labour input growth and the remaining 22% to total factor productivity (TFP) growth. There is no evidence of a shift of factor inputs towards more efficient industries. TFP growth averaged 3% annually in 1975-95. Performance varied greatly across industries, but the policy changes that have taken effect since 1986 have definitely been beneficial for all industries. Put in an international perspective, however, Indonesia's TFP levels show no signs of catch-up with the world frontier.
Original languageEnglish
Pages (from-to)75-97
Number of pages23
JournalBulletin of Indonesian Economic Studies
Volume35
Issue number1
DOIs
Publication statusPublished - 1999

Fingerprint Dive into the research topics of 'Indonesia's ascent on the technology ladder : capital stock and total factor productivity in Indonesian manufacturing'. Together they form a unique fingerprint.

Cite this