The Significance of Total Factor Productivity (TFP) Measurement for Industry to Achieve Robust Industrial Productivity
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2026
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| author | Panjaitan, Leonard Tiopan |
| author_facet | Panjaitan, Leonard Tiopan |
| contents | <p><span>This paper investigates the significance of Total Factor Productivity (TFP) measurement as a diagnostic and strategic tool for industrial firms operating in resource-intensive and capital-heavy sectors in Indonesia. Using two complementary methodologies — the Cobb-Douglas production function approach and the Törnqvist superlative index — the study quantifies TFP levels and growth rates for two publicly listed Indonesian companies: PT Solusi Bangun Indonesia Tbk (SBI), a cement manufacturer, and PT Aneka Tambang Tbk (ANTAM), a diversified mining company, over the period 2022–2024. Primary data are extracted from the respective Annual Reports and Sustainability Reports of both companies. For SBI, both methods consistently reveal a declining TFP trajectory — from an index of 100 in 2022 to approximately 91.7–93.2 by 2024 — attributable to falling gross profit margins against a backdrop of cement market oversupply, weakening retail demand, and the productivity drag of large ongoing capital investments not yet yielding full output. For ANTAM, both methods show a sharp TFP contraction in 2023 (index: approximately 76–79), followed by a partial recovery in 2024 (index: approximately 82–85), driven by the divergent performance of its nickel and gold commodity segments. A comparative analysis reveals that the Törnqvist index, by utilising empirically derived cost-share weights, captures structural shifts in input utilisation more accurately than the fixed-elasticity Cobb-Douglas framework. The paper argues that TFP measurement is not merely an academic exercise but a vital instrument for corporate strategic decision-making, benchmarking operational efficiency, and aligning resource allocation with long-term productivity goals. Recommendations are offered for accelerating TFP recovery in both firms.</span></p> |
| format | Recurso digital |
| id | zenodo_https___doi_org_10_5281_zenodo_19380585 |
| institution | Zenodo |
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| publishDate | 2026 |
| publisher | Zenodo |
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| spellingShingle | The Significance of Total Factor Productivity (TFP) Measurement for Industry to Achieve Robust Industrial Productivity Panjaitan, Leonard Tiopan Productivity Industrial Productivity Total Factor Productivity (TFP) <p><span>This paper investigates the significance of Total Factor Productivity (TFP) measurement as a diagnostic and strategic tool for industrial firms operating in resource-intensive and capital-heavy sectors in Indonesia. Using two complementary methodologies — the Cobb-Douglas production function approach and the Törnqvist superlative index — the study quantifies TFP levels and growth rates for two publicly listed Indonesian companies: PT Solusi Bangun Indonesia Tbk (SBI), a cement manufacturer, and PT Aneka Tambang Tbk (ANTAM), a diversified mining company, over the period 2022–2024. Primary data are extracted from the respective Annual Reports and Sustainability Reports of both companies. For SBI, both methods consistently reveal a declining TFP trajectory — from an index of 100 in 2022 to approximately 91.7–93.2 by 2024 — attributable to falling gross profit margins against a backdrop of cement market oversupply, weakening retail demand, and the productivity drag of large ongoing capital investments not yet yielding full output. For ANTAM, both methods show a sharp TFP contraction in 2023 (index: approximately 76–79), followed by a partial recovery in 2024 (index: approximately 82–85), driven by the divergent performance of its nickel and gold commodity segments. A comparative analysis reveals that the Törnqvist index, by utilising empirically derived cost-share weights, captures structural shifts in input utilisation more accurately than the fixed-elasticity Cobb-Douglas framework. The paper argues that TFP measurement is not merely an academic exercise but a vital instrument for corporate strategic decision-making, benchmarking operational efficiency, and aligning resource allocation with long-term productivity goals. Recommendations are offered for accelerating TFP recovery in both firms.</span></p> |
| title | The Significance of Total Factor Productivity (TFP) Measurement for Industry to Achieve Robust Industrial Productivity |
| topic | Productivity Industrial Productivity Total Factor Productivity (TFP) |
| url | https://doi.org/10.5281/zenodo.19380585 |