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Jurnal Ekonomi Malaysia

57 (2) 2023 97 – 105

Impact of Agglomeration on Labour Productivity: Food and Beverage Industry in Indonesia

Faculty of Economics
Putra Indonesia University
Jl. Dr. Muwardi Gg. Perjuangan No.66, Muka, Kecamatan Cianjur
Cianjur Regency, West Java Province 46113, INDONESIA.

djuwarni.wenny@gmail.com

Faculty of Economics and Business
Padjadjaran University
Jl. Raya Bandung – Sumedang KM 21, Sumedang Regency
West Java Province 45363, INDONESIA.

rina.indiastuti@unpad.ac.id

Faculty of Economics and Business
Padjadjaran University
Jl. Raya Bandung – Sumedang KM 21, Sumedang Regency
West Java Province 45363, INDONESIA

raden.muhamad@unpad.ac.id

Faculty of Economics and Business
Padjadjaran University
Jl. Raya Bandung – Sumedang KM 21, Sumedang Regency
West Java Province 45363, INDONESIA

maman.setiawan@unpad.ac.id

Abstract

The aim of this study is to elucidate the impact of agglomeration on labour productivity. Company-level panel data covering 67,619 food and beverage industry in Indonesia were used in the analyses in the period 2000-2017. The level of agglomeration impact on productivity was measured using the spatial EG index by Ellison and Glaeser (1997). The study established that the agglomeration of food and beverage sub-industries presents a positive and significant effect on labour productivity. It also revealed that the productivity of governmental companies is higher than that of private ones. In terms of company size, when the agglomeration level is constant, small enterprises tend to gain larger benefits from productivity improvement, as a consequence of agglomeration externalities, compared to larger businesses.

Keywords

Agglomeration; food and beverage; Indonesia; industry; labour; productivity

JEL Codes

C33, J50, L14.D24, L66, R12
http://dx.doi.org/10.17576/JEM-2023-5702-07
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Bibliography

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Djuarni, W., Indiastuti, R., Purnagunawan, R. M., & Setiawan, M. (2023). Impact of Agglomeration on Labour Productivity: Food and Beverage Industry in Indonesia. Jurnal Ekonomi Malaysia, 57(2), 97–105. http://dx.doi.org/10.17576/JEM-2023-5702-07

@article{djuarni2023impact,
  title={Impact of Agglomeration on Labour Productivity: Food and Beverage Industry in Indonesia},
  author={Djuarni, Wenny and Indiastuti, Rina and Purnagunawan, Rd.M. and Setiawan, Maman},
  journal={Jurnal Ekonomi Malaysia},
  volume={57},
  number={2},
  pages={97—105},
 

year={2023},
}

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