ECONOMIES OF SCALE OF RATTAN FURNITURE INDUSTRY IN PALEMBANG, SOUTH SUMATERA
| Main Author: | Mukhlis, Mukhlis |
|---|---|
| Format: | Proceeding PeerReviewed application/pdf |
| Subjects: | |
| Online Access: |
http://eprints.unsri.ac.id/7300/1/057_SEABC_Mukhlis.pdf http://eprints.unsri.ac.id/7300/ |
Daftar Isi:
- There is an interesting phenomenon related to the role of small businesses of rattan furniture in Palembang, which mainly related to economies of scale and the nature of the production. This will have an impact on competitiveness, continuity of availability of raw materials and labor absorption. Therefore, this study focused on economies of scale and the nature of the production of rattan furniture business. The data used in this study are primary data obtained through field survey to 25 craftsmen of wicker furniture in the District II East Ilir Palembang as rattan furniture industry center. The model used in this study is a Cobb-Douglas model which estimated using a regression approach. The results show that: 1) Economies of scale position of rattan furniture is decreasing return in scale. This indicates that the expansion of production proportionately reduce the rate of profits; and 2) Nature of the industrial production of rattan furniture in Palembang were labor intensive, because of the use of labor in the production process is more widely used than capital utilization. Keywords: Labor, Capital, Economies of Scal