Abstract
This study empirically measures productivity and its decomposition of the SMEs engaged in the creative economic sector across 23 districts/cities in Aceh province, Indonesia over the period 2014-2018. Using Data Envelopment Analysis (DEA) to measure the Malmquist Total Factor Productivity (TFP) index, the study documented a low productivity level SMEs across the province. Although the technical efficiency showed a positive trend, but the declining in their efficiency level has caused only a slight increase in the TFP of SMEs over the study period. These findings suggested that to improve their productivity; the SMEs should continuously enhance efficiency level and technical efficiency by implementing good business governance principles and extensively utilizing ICT facilities, such as online sales and internet of things in their marketing activities. The SMEs should fully utilize existing capital and properly selected and mixed inputs to produce maximum output. Finally, the government should give priority for promoting SMEs in the districts/cities that experienced lower productivity level by providing more financial assistance and regular entrepreneurial and managerial training programs.
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