ANALISIS FAKTOR-FAKTOR PENENTU TINGKAT PROFITABILITAS PERUSAHAAN DI SEKTOR INDUSTRI MANUFAKTUR INDONESIA (STUDI KASUS PADA INDUSTRI CAT DI PASURUAN)

Abstract

The purpose of this research is to analyze the variables which determine the firm profitability level (case study: cat manufacturing industry). In the basic framework of industrial economics that is notified that the firm or industrial performance is affected by their structure and conduct. This interaction pattern then created an interactive relationship between Structure-Conduct-Performance (S-C-P). The S-C-P framework has been a long time used widely in industrial analysis.

The variables that used in this research are industrial concentration – represented by sales shares of four largest firms (CR4), advertising expenditure, minimum efficient of scale and sales growth. The data, we used the 1997 large and medium manufacturing survey. Using the econometric approach, the results show that all independent variables in the model have a positive and significant influence to firm profitability level. Those results were in line with the theory and also in line with the similar previous research.

Based on the results, we obtained two crucial implications, first for the firm and secondly for the government. For the firm is that all the variables in the model have to be considered by the management when they develop a marketing strategy, especially for industrial concentration (CR4) which indicated the market power and advertising which indicated the firm capability in making product differentiation. This strategy will affect the firm sustainability in facing new entrants. Moreover, the crucial implication for the government is that they need to give intensive control and investigation to the firm or industrial conduct, especially relate to their strategy in maximizing market profit. The soundness government policies need to be implemented to ensure the fair competition among the firms and to reduce market distortion.