Title : THE RELATIONSHIP BETWEEN TECHNICAL EFFICIENCY AND MARKET CONCENTRATION IN THE CEMENT INDUSTRY IN INDONESIA
Author : MOCHAMAD TAUFIQ PRASETYO
Universitas Airlangga
Item Type : Thesis (Thesis)
Abstract
The development of the real sector in Indonesia, especially construction, infrastructure and property, has driven an increase in demand for cement products. The cement industry is seen as a very prospective industry at present, so new players are emerging into the cement industry in Indonesia. For this reason, the cement industry in Indonesia is trying to maintain its position so as not to compete with these new players. Through technical efficiency, cement companies try to compete with new players. During 2001 to 2011 cement companies in Indonesia were still concentrated in only 4 large companies. Ideas regarding the relationship between technical efficiency and market concentration will be applied in this research. If technical efficiency affects market concentration then industry behavior in that market is included in the Efficient-Structure (ES) Hypothesis category, conversely if market concentration affects technical efficiency negatively then behavior in that market is included in the Quiet-Life (QL) Hypothesis category. The technical efficiency calculation uses the Data Envelopment Analysis (DEA) tool, while the market concentration calculation uses the Concentration Ratio-4 (CR4). To see the direction of the relationship between technical efficiency (TE) and market concentration (CR), Vector Auto Regressive (VAR) was used and tested with the Granger Causality Test. The final results show that technical efficiency in the cement industry influences market concentration in the cement industry. The behavior of the cement industry during 2001-2011 is included in the Efficient-Structure (ES) Hypothesis category.
Keywords : technical efficiency, market concentration, the cement industry
