SMALL ENTERPRISE AND FIRM-LEVEL TECHNICAL EFFICIENCY IN THE INDONESIAN GARMENT INDUSTRY

This paper examines technical efficiency in the Indonesian garment ind ustry, based on the country's 1986 Census of Small Industry. Drawing o n a sample of 2250 firms, our analysis suggests that inter-firm variat ions in efficiency are very considerable. The paper then investigates the correlates of these variations finding, in particular, a positive correlation between technical efficiency and each of export orientatio n, financial integration and female participation in the workforce. It is also found that there is a significant level of labour-capital sub stitution in the industry.