How efficient and productive are co-operatives in Indonesia? Empirical evidence from data envelopment analysis

Article 33 of the 1945 Constitution of Indonesia positioned co-operative as a pillar and backbone of the national economy. To optimally function as the pillar and backbone of the economy, the co-operatives should be managed efficiently and productively. Considering their pivotal roles in the Indones...

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Autores principales:	Ishak Hasan, A. Azhari, M. Shabri Abd. Majid
Formato:	article
Lenguaje:	EN ES
Publicado:	AECOOP Escuela de Estudios Cooperativos 2018
Materias:	Eficiencia Factor total de productividad Cooperativa Análisis Envolvente de Datos Índice de Malmquist. Economics as a science HB71-74
Acceso en línea:	https://doaj.org/article/5d09841a091341ecae8051e66e417384
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spelling	oai:doaj.org-article:5d09841a091341ecae8051e66e4173842021-11-12T13:14:35ZHow efficient and productive are co-operatives in Indonesia? Empirical evidence from data envelopment analysis1135-66181885-803110.5209/REVE.60208https://doaj.org/article/5d09841a091341ecae8051e66e4173842018-05-01T00:00:00Zhttp://revistas.ucm.es/index.php/REVE/article/view/60208https://doaj.org/toc/1135-6618https://doaj.org/toc/1885-8031Article 33 of the 1945 Constitution of Indonesia positioned co-operative as a pillar and backbone of the national economy. To optimally function as the pillar and backbone of the economy, the co-operatives should be managed efficiently and productively. Considering their pivotal roles in the Indonesian economy, this study is aimed at empirically measuring efficiency and productivity of the co-operatives across 33 provinces nationwide. Three inputs (i.e., own capital, external financing, and board size) and one output (co-operative surplus) over the period 2010-2015 are analyzed using Data Envelopment Analysis (DEA) with Malmquist Index. The study documented that the co-operatives were highly inefficient, indicated by the average level of inefficiency of 47.6%. Out of the co-operatives in 33 provinces, 42.42% were found to record efficiency level of less than 50% and only 12.12% of them were fully efficient. In addition, the study also documented that, of 33 provinces, only the co-operatives in 14 provinces were found to experience an increase in their total factor productivity. The co-operatives in the province of East Nusa Tenggara recorded the highest productivity progress by 49.9%, while the co-operative in the province of Bangka Belitung recorded the highest productivity regress by -24.4%. Overall, the productivity level of the co-operatives only slightly increased by 9.9% over the study period nationwide, which was mainly contributed by an increase in technical efficiency. These findings implied that to further enhance the productivity level of the co-operatives, improving their pure efficiency should be prioritized, followed by enhancing their scale efficiency and technical efficiency. The co-operatives should provide regular training for their staff, professional management, adopt advanced technology, and enlarge their size by merging small co-operatives become a larger entity.Ishak HasanA. AzhariM. Shabri Abd. MajidAECOOP Escuela de Estudios CooperativosarticleEficienciaFactor total de productividadCooperativaAnálisis Envolvente de DatosÍndice de Malmquist.Economics as a scienceHB71-74ENESRevista de Estudios Cooperativos, Vol 128, Iss 0, Pp 149-172 (2018)
institution	DOAJ
collection	DOAJ
language	EN ES
topic	Eficiencia Factor total de productividad Cooperativa Análisis Envolvente de Datos Índice de Malmquist. Economics as a science HB71-74
spellingShingle	Eficiencia Factor total de productividad Cooperativa Análisis Envolvente de Datos Índice de Malmquist. Economics as a science HB71-74 Ishak Hasan A. Azhari M. Shabri Abd. Majid How efficient and productive are co-operatives in Indonesia? Empirical evidence from data envelopment analysis
description	Article 33 of the 1945 Constitution of Indonesia positioned co-operative as a pillar and backbone of the national economy. To optimally function as the pillar and backbone of the economy, the co-operatives should be managed efficiently and productively. Considering their pivotal roles in the Indonesian economy, this study is aimed at empirically measuring efficiency and productivity of the co-operatives across 33 provinces nationwide. Three inputs (i.e., own capital, external financing, and board size) and one output (co-operative surplus) over the period 2010-2015 are analyzed using Data Envelopment Analysis (DEA) with Malmquist Index. The study documented that the co-operatives were highly inefficient, indicated by the average level of inefficiency of 47.6%. Out of the co-operatives in 33 provinces, 42.42% were found to record efficiency level of less than 50% and only 12.12% of them were fully efficient. In addition, the study also documented that, of 33 provinces, only the co-operatives in 14 provinces were found to experience an increase in their total factor productivity. The co-operatives in the province of East Nusa Tenggara recorded the highest productivity progress by 49.9%, while the co-operative in the province of Bangka Belitung recorded the highest productivity regress by -24.4%. Overall, the productivity level of the co-operatives only slightly increased by 9.9% over the study period nationwide, which was mainly contributed by an increase in technical efficiency. These findings implied that to further enhance the productivity level of the co-operatives, improving their pure efficiency should be prioritized, followed by enhancing their scale efficiency and technical efficiency. The co-operatives should provide regular training for their staff, professional management, adopt advanced technology, and enlarge their size by merging small co-operatives become a larger entity.
format	article
author	Ishak Hasan A. Azhari M. Shabri Abd. Majid
author_facet	Ishak Hasan A. Azhari M. Shabri Abd. Majid
author_sort	Ishak Hasan
title	How efficient and productive are co-operatives in Indonesia? Empirical evidence from data envelopment analysis
title_short	How efficient and productive are co-operatives in Indonesia? Empirical evidence from data envelopment analysis
title_full	How efficient and productive are co-operatives in Indonesia? Empirical evidence from data envelopment analysis
title_fullStr	How efficient and productive are co-operatives in Indonesia? Empirical evidence from data envelopment analysis
title_full_unstemmed	How efficient and productive are co-operatives in Indonesia? Empirical evidence from data envelopment analysis
title_sort	how efficient and productive are co-operatives in indonesia? empirical evidence from data envelopment analysis
publisher	AECOOP Escuela de Estudios Cooperativos
publishDate	2018
url	https://doaj.org/article/5d09841a091341ecae8051e66e417384
work_keys_str_mv	AT ishakhasan howefficientandproductivearecooperativesinindonesiaempiricalevidencefromdataenvelopmentanalysis AT aazhari howefficientandproductivearecooperativesinindonesiaempiricalevidencefromdataenvelopmentanalysis AT mshabriabdmajid howefficientandproductivearecooperativesinindonesiaempiricalevidencefromdataenvelopmentanalysis
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How efficient and productive are co-operatives in Indonesia? Empirical evidence from data envelopment analysis

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