Performance Evaluation of Large and Medium Scale Manufacturing Industry Clusters in East Java Province, Indonesia
Abstract
East Java Province in Indonesia is the centre of the eastern Indonesia region and it has a fairly high economic significance, which has contributed 14.85% to the national Gross Domestic Product (GDP). The role of Large and Medium Scale Manufacturing Industry (LMSMI) clusters in this province is very important and strategic as one of the main drivers for economic progress and it becomes a part of the efforts to improve the society's life. Therefore, it is necessary to evaluate the performance of LMSMI clusters continuously. The purpose of this study is to investigate the productivity changes of LMSMI clusters in East Java Province, Indonesia, so that they will be able to survive, grow and compete in facing global competition. The method used in this study is the method of DEA-based Malmquist Productivity Index. The result of this study indicates that 50% of the LMSMI clusters in East Java Province are in the category of improved productivity, while the remaining clusters are in the category of declining productivity.