DOI: 10.36347/sjebm.2019.v06i09.001

Pages: 441-451

This research aims to analyze the total response of productivity factors in the medium scale manufacturing industry in Indonesia. Pooled secondary data was collected from the Indonesian Central Bureau of Statistics for the period 2011-2014. The model estimated is a multiple regression model. Stationary test, cointegration test, redundant fixed effect test, and Hausman test for random effects were used to estimate the common, fixed, and random models of cross section at national level pooled data in Indonesia for the food industry, textile industry, manufacturing industry and for large and medium scale industries, large industries, and medium industries. The results of the study showed that the total productivity factor for productive labor variable was 0.4961; which informs the position of decreasing return to scale in the food, textile and manufacturing industries as well as the manufacturing industry on large and medium scale industries, large industries, and medium industries. The ability to change production factor variables which are low in explaining changes in the output value variable and decreasing return to scale position makes it clear about the causes of problems outside of the productivity factors that give rise to the ambiguity of improving economic growth in the manufacturing industry in Indonesia.