This study analyzes the effect of the number of workers, input value, and the number of firms on the value added of micro and small manufacturing industries (MSMI) in Indonesia at the provincial level during 2019–2024. The research is motivated by persistent disparities in value added across provinces, suspected to stem from differences in production capacity and firm structure. Using panel data covering 34 provinces over six years (204 observations), sourced from the Indonesian Central Bureau of Statistics (BPS), this study applies panel data regression analysis. The Chow and Hausman tests consistently selected the Fixed Effect Model (FEM) as the most appropriate estimation approach. Classical assumption tests, namely multicollinearity and heteroskedasticity, indicate the model is free from serious violations, with all Centered VIF values below 10 and all heteroskedasticity probabilities above 0.05. The estimation results show that the number of workers and input value have a positive and significant effect on value added, with probability values of 0.0011 and 0.0000, respectively, while the number of firms has no significant effect (probability of 0.7926). Simultaneously, the three independent variables significantly affect value added, shown by an F-statistic of 1001.827 with an Adjusted R-squared of 0.9944, meaning the model explains 99.44 percent of the variation in value added. These findings suggest production capacity, rather than sheer quantity of business units, is the primary determinant of value added in Indonesia's micro and small manufacturing sector.