FUNGSI PRODUKSI INDUSTRI YANG HETEROGEN

This study provides empirical examination of the relationship between production factors of heterogeneous firms and productivity level across Indonesian manufacturing industry adapting several firm-level analysis of international trade by Bernard et. al (2000), Yeaple (2002) and Melitz (2002) with traditional Cobb-Douglas model using Indonesian Large and Medium Manufacturing Industry data from 2005-2009 based on 3 Digits ISIC Classifications. Identifying a connection between firm�s heterogeneity and industry productivity level has important implications for the literature examining the effect of trade liberalization on economic growth. This study finds that firms with higher export penetration level tend to be more skill intensive, more capital intensive and more productive than those who do less export. However, this study is still yet to include external productivity factors such as government policy, political situation and other factors affecting the international trade process