Open AccessDecomposing total factor productivity of SMEs in agricultural sector in Aceh, Indonesia
Author(s) -
M. Shabri Abd. Majid,
Faisal Faisal,
Heru Fahlevi,
A. Azhari,
Hijri Juliansyah
Publication year - 2022
Publication title -
iop conference series. earth and environmental science
Language(s) - English
Resource type - Journals
eISSN - 1755-1307
pISSN - 1755-1315
DOI - 10.1088/1755-1315/951/1/012051
Subject(s) - total factor productivity , productivity , agriculture , data envelopment analysis , business , agricultural economics , government (linguistics) , agricultural science , economic growth , economics , geography , mathematical optimization , linguistics , philosophy , environmental science , mathematics , archaeology
This study measures and decomposes the Total Factor Productivity (TFP) of the SMEs in the agricultural sector across 23 regencies/cities in Aceh province, Indonesia during the 2015-2019 period. Using Data Envelopment Analysis (DEA), the study found a low level of SMEs’ productivity during the study period. The SMEs in Aceh province recorded different levels of TFP. Overall, the SMEs’ TFP has slightly declined, contributed mainly by an increase in efficiency level and a decline in the technical efficiency change. These findings showed the importance of adopting advanced agricultural-related technologies and implementing good SMEs’ governance principles to further improve SMEs’ TFP. Finally, the government must prioritize promoting non-productive SMEs across the 23 regencies/districts in the province by offering sufficient financial aids and conducting professional managerial training programs.