IMPROVING THE PERFORMANCE OF MICRO SMALL AND MEDIUM ENTERPRISES BATIK IN THE INDUSTRIAL ERA 4.0 USING TRANSACTION COST ANALYSIS AND DATA ENVELOPMENT ANALYSIS
Setyo Kuncoro, Sarah Fadilla, Dwi Rahmawati, Hari Karyadi

Universitas Terbuka

Abstract

The Indonesian batik industry faces significant challenges in the era of the Industrial Revolution 4.0, especially in improving efficiency and competitiveness. This study aims to analyse the effect of transaction costs and business efficiency on the performance of batik Micro, small and medium enterprises (MSMEs) in Yogyakarta and Solo. With a quantitative approach, data was obtained through questionnaires distributed to 48 batik business respondents, processed using Data Envelopment Analysis (DEA) and Generalised Structured Component Analysis (GSCA). The results showed that the efficiency of batik businesses, both technical and scale, was not optimal so that it was not significant in improving business performance. In contrast, transaction costs have a positive and significant effect on business performance. This finding shows that the management of transaction costs, especially related to the purchase of raw materials and product distribution, is the main key to success. This research provides strategic implications for batik MSME players to adopt modern technology and innovation to reduce transaction costs and improve operational efficiency. In addition, government policies that support distillation and cross-sector collaboration are essential to ensure the sustainability of the batik industry in the future.

Keywords: Batik, Transaction Cost, Efficiency, Data Envelopment Analysis, MSMEs

Topic: Business Transformation in the Digital Era