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All Journal Indonesian Journal Economic Review (IJER)
Eugenia Hendrini Patricya Tanan
Politeknik Negeri Kupang
Economics, Econometrics & Finance

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From Comparative to Competitive Advantage: Value Chain Upgrading and Salt Industrialization in Kabupaten Kupang, Indonesia Eugenia Hendrini Patricya Tanan; Agnes Kidi Beda Mudamakin; Melda Mariana Poeh; Marius Masri
Indonesian Journal Economic Review (IJER) Vol. 6 No. 3 (2026): September
Publisher : Divisi Riset, Lembaga Mitra Solusi Teknologi Informasi (L-MSTI)

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.59431/ijer.v6i3.1005

Abstract

Salt production in Kabupaten Kupang has strong natural potential, but weak downstream processing limits local value capture. This study evaluates how comparative advantage can be converted into competitive advantage through value-chain upgrading and salt industrialization. A descriptive quantitative design, supported by interviews, field observations, and secondary data, used 73 valid stakeholder responses from Nunkurus, Merdeka, and Bipolo. Smallholder production showed a Domestic Resource Cost Ratio of 0.55, while the company-level analytical scenario produced 0.61, indicating favorable comparative efficiency. However, technology access, infrastructure, product diversification, farmer institutions, and MSME/cooperative participation remained weak. Smallholders were concentrated in raw-salt activities, and substantial corporate output was processed outside the region. The study's novelty lies in integrating comparative and competitive advantage, value-chain structure, industrial readiness, and welfare-oriented considerations within an island-region context. Policy priorities include local washing/refining capacity, quality upgrading, logistics, stronger cooperatives, and formal farmer-company partnerships to retain more value in coastal communities.
Co-Authors Agnes Kidi Beda Mudamakin Marius Masri Melda Mariana Poeh