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Ownership and efficiency in engineering firms in India, 1990-91 to 1999-2000

Author

Listed:
  • B.N.Goldar

    (Indian Council for Research on International Economic Relations)

  • V.S.Renganathan

    (Indian Council for Research on International Economic Relations)

  • Rashmi Banga

    (Indian Council for Research on International Economic Relations)

Abstract

The paper analyzes the effect of ownership on efficiency of engineering firms in India in the 1990s, a decade of major economic reforms. Technical efficiency of firms, estimated with help of a stochastic frontier production function, is considered for the analysis. A comparison of technical efficiency is made among three groups of firms in Indian engineering: (1) firms with foreign ownership, (2) domestically owned private sector firms, and (3) public sector firms. The results clearly indicate that foreign firms in Indian engineering industry have higher technical efficiency than domestically owned firms. No significant difference in technical efficiency is found between private sector and public sector firms among the domestically owned firms. There are indications of a process of efficiency convergence - the domestically owned firms tending to catch up with foreign owned firms in terms of technical efficiency. The results show a positive relationship between international trade orien

Suggested Citation

  • B.N.Goldar & V.S.Renganathan & Rashmi Banga, 2003. "Ownership and efficiency in engineering firms in India, 1990-91 to 1999-2000," Indian Council for Research on International Economic Relations, New Delhi Working Papers 115, Indian Council for Research on International Economic Relations, New Delhi, India.
    • Handle: RePEc:ind:icrier:115
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    References listed on IDEAS

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    5. Kumbhakar, Subal C & Ghosh, Soumendra & McGuckin, J Thomas, 1991. "A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. Dairy Farms," Journal of Business & Economic Statistics, American Statistical Association, vol. 9(3), pages 279-286, July.
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    Cited by:

    1. G. Chidambaran Iyer, 2009. "Indian multinationals, foreign multinationals and domestic firms," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 12(3), pages 243-247.
    2. Hanousek, Jan & Kočenda, Evžen & Shamshur, Anastasiya, 2015. "Corporate efficiency in Europe," Journal of Corporate Finance, Elsevier, vol. 32(C), pages 24-40.
    3. Jan Hanousek & Evžen Kočenda & Anastasiya Shamshur, 2014. "Efektivita evropských firem [Efficiency of European Firms]," Politická ekonomie, Prague University of Economics and Business, vol. 2014(3), pages 303-322.
    4. V. Pradeep & Mita Bhattacharya & Jong-Rong Chen, 2017. "Spillover Effects of Research and Development, Exports and Foreign Investment on Productivity," Journal of South Asian Development, , vol. 12(1), pages 18-41, April.
    5. G. Chidambaran Iyer, 2009. "Indian multinationals, foreign multinationals and domestic firms," Journal of Economic Policy Reform, Taylor and Francis Journals, vol. 12(3), pages 243-247.

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