East Java Province in
Indonesia is the centre of the eastern Indonesia region and it has a fairly
high economic significance, which has contributed 14.85% to the national Gross
Domestic Product (GDP). The role of Large and Medium Scale Manufacturing
Industry (LMSMI) clusters in this province is very important and strategic as
one of the main drivers for economic progress and it becomes a part of the
efforts to improve the society's life. Therefore, it is necessary to evaluate
the performance of LMSMI clusters continuously. The purpose of this study is to
investigate the productivity changes of LMSMI clusters in East Java Province,
Indonesia, so that they will be able to survive, grow and compete in facing
global competition. The method used in this study is the method of DEA-based
Malmquist Productivity Index. The result of this study indicates that 50% of
the LMSMI clusters in East Java Province are in the category of improved
productivity, while the remaining clusters are in the category of declining
productivity.
