Influence of Input Value and Labor Expenditure on Output Value: A Case of Micro and Small Scale Industry in Indonesia

IJBE (Integrated Journal of Business and Economics), Vol.4, No.1 (2020), pp.45-60

16 Pages Posted: 6 May 2020

See all articles by Tongam Sihol Nababan

Tongam Sihol Nababan

University of HKBP Nommensen, Faculty of Economics

Elvis Fresly Purba

University of HKBP Nommensen

Jongkers Tampubolon

Universitas HKBP Nommensen

Date Written: April 11, 2020

Abstract

Objectives of the study are:

(1) to estimate the influence of input value and labor expenditure on the output of micro and small industries in Indonesia,

(2) to analyze the form of translog production function that is compatible with micro and small industries in Indonesia.

The analytical method used is descriptive method and analysis of translog production functions with scenarios: linear translog function, complete second-order or quadratic linear translog function, and linear translog function with interaction. Results showed that:

(1) the function of linear translog production with interaction was more suitable used to estimate the production output of micro and small industries in Indonesia,

(2) input value and labor expenditure had a positive and significant effect on output values,

(3) micro-industry enterprises more emphasis on the allocation of larger workforce, while small-scale industry emphasizes greater allocation of input value,

(4) the allocation of input value and labor expenditure are more efficient in micro-industries compared to small-scale industries.

Keywords: input value, output value, labor expenditure, translog production function, micro-industry, small-scale industry

JEL Classification: D13, D24

Suggested Citation

Nababan, Tongam Sihol and Purba, Elvis Fresly and Tampubolon, Jongkers, Influence of Input Value and Labor Expenditure on Output Value: A Case of Micro and Small Scale Industry in Indonesia (April 11, 2020). IJBE (Integrated Journal of Business and Economics), Vol.4, No.1 (2020), pp.45-60 , Available at SSRN: https://ssrn.com/abstract=3573412 or http://dx.doi.org/10.2139/ssrn.3573412

Tongam Sihol Nababan (Contact Author)

University of HKBP Nommensen, Faculty of Economics ( email )

Jln. Sutomo No. 4A
Medan, North Sumatra 20118
Indonesia
08126411543 (Phone)

Elvis Fresly Purba

University of HKBP Nommensen ( email )

Jln Sutomo No 4A Medan
Medan, ID North Sumatera 20234
Indonesia

Jongkers Tampubolon

Universitas HKBP Nommensen ( email )

Jln. Sutomo No.4A
Medan, North Sumatra 20234
Indonesia

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
5
Abstract Views
81
PlumX Metrics