Total Factor Productivity Analysis, Solow Residual Study with Growth Accounting Model in Surabaya City

Elwira Dwinanda Hakim; M Taufiq; Wirya Wardaya

doi:10.55927/fjmr.v4i10.522

Authors

Elwira Dwinanda Hakim Universitas Pembangunan Nasional “Veteran” Jawa Timur
M Taufiq Universitas Pembangunan Nasional “Veteran” Jawa Timur
Wirya Wardaya Universitas Pembangunan Nasional “Veteran” Jawa Timur

DOI:

https://doi.org/10.55927/fjmr.v4i10.522

Keywords:

Economic Growth, Total Factor Productivity, Growth Accounting Model

Abstract

Total Factor Productivity (TFP) represents the efficiency level of input utilization in generating output within a specific region, often reflecting the role of technological progress and innovation. This study analyzes the TFP of Surabaya City from 2011 to 2024 using the Growth Accounting Model based on the Solow Residual approach. The main variables considered are Gross Regional Domestic Product (GRDP), Labor Force (Employment), and Capital. The research adopts a descriptive-verificative method to calculate and estimate the TFP value for 2025 using trend analysis, which allows projection despite incomplete future data. The findings reveal that TFP growth in Surabaya tends to fluctuate and remain relatively low, indicating inefficiencies in combining labor and capital to generate optimal output. Interestingly, during the COVID-19 pandemic year of 2020, the city achieved a positive TFP value, suggesting that reduced input utilization improved production efficiency. These results highlight the importance of technological innovation, workforce quality, and effective policy intervention in improving regional productivity. The study emphasizes the need for the Surabaya City Government to enhance efficiency through strategic investment in technology, human capital, and policy support to sustain long-term economic growth and competitiveness.

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