Proceedings of the 2nd International Conference on Multidisciplinary Sciences for Humanity in Society 5.0 Era (ICOMSH 2022)

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Profit Efficiency Of Small Medium Enterprises And Its Effect On Labor Absorption In Malang City

Authors
Galih Ramadhan Febrianto1, *
1Faculty of Economics and Business, Islamic University of Malang, Mayjen Haryono Street 193, Malang, 65144, East Java, Indonesia
*Corresponding author. Email: Galihrf50@gmail.com
Corresponding Author
Galih Ramadhan Febrianto
Available Online 25 March 2024.
DOI
10.2991/978-2-38476-204-0_20How to use a DOI?
Keywords
Efficiency; UKM; Income; Labour
Abstract

Small and medium enterprises are a real sector that has an important role in economic development. There are 64 million SMEs that contribute 97% of total employment and 60% of Indonesia’s GDP in 2021. Based on these data, SMEs have an important role in absorbing labour and economic development. However, in practice, SMEs have problems in terms of managerial and financial performance. This study uses an efficiency analysis statistical approach with a transcendental logarithmic profit efficiency model and multiple linear regression analysis to investigate the effect of performance efficiency and income levels as indicators of the quality of work of SMEs on employment. The results showed that the average efficiency score of UKM in Malang City was only 26%, which means that the performance of UKM in terms of efficiency is still very low. Furthermore, based on multiple regression analysis, it was found that the performance efficiency variable has a negative effect on the labour absorption variable. In contrast, the income level variable significantly positively affects employment. The results of this regression explain that efficient SMEs tend not to employ many workers, while SMEs with high-income levels tend to use a lot of workers.

Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

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Volume Title
Proceedings of the 2nd International Conference on Multidisciplinary Sciences for Humanity in Society 5.0 Era (ICOMSH 2022)
Series
Advances in Social Science, Education and Humanities Research
Publication Date
25 March 2024
ISBN
978-2-38476-204-0
ISSN
2352-5398
DOI
10.2991/978-2-38476-204-0_20How to use a DOI?
Copyright
© 2023 The Author(s)
Open Access
Open Access This chapter is licensed under the terms of the Creative Commons Attribution-NonCommercial 4.0 International License (http://creativecommons.org/licenses/by-nc/4.0/), which permits any noncommercial use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons license and indicate if changes were made.

Cite this article

risenwbib
TY  - CONF
AU  - Galih Ramadhan Febrianto
PY  - 2024
DA  - 2024/03/25
TI  - Profit Efficiency Of Small Medium Enterprises And Its Effect On Labor Absorption In Malang City
BT  - Proceedings of the 2nd International Conference on Multidisciplinary Sciences for Humanity in Society 5.0 Era (ICOMSH 2022)
PB  - Atlantis Press
SP  - 237
EP  - 245
SN  - 2352-5398
UR  - https://doi.org/10.2991/978-2-38476-204-0_20
DO  - 10.2991/978-2-38476-204-0_20
ID  - Febrianto2024
ER  -