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Econometric Analysis Of Efficiency In The Indian Manufacturing Sector

Author

Listed:
  • Dimitriu, Maria Caracota

    (The Academy of Economic Studies, Faculty of Business Administration in Foreign Languages (English and French).)

  • Savu, Blessy Mathew

Abstract

Performance in the manufacturing sector, in relation to productivity growth, scale efficiency and technical efficiency in India is dichotomous in nature, depending on whether the firm in question functions in the formal or informal sector. The main differences between these two sectors and the changes over a decade are observed and analyzed, using aggregated data for the entire manufacturing sector in India. Using stochastic frontier approach, and therein the maximum likelihood models, efficiency in the two sectors is compared and verified against factors affecting the levels of efficiency obtained for each major industry category. The results are analyzed against realities on ground-level from a socio-economic perspective.

Suggested Citation

  • Dimitriu, Maria Caracota & Savu, Blessy Mathew, 2010. "Econometric Analysis Of Efficiency In The Indian Manufacturing Sector," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(1), pages 182-197, March.
    • Handle: RePEc:rjr:romjef:v::y:2010:i:1:p:182-197
    as

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    References listed on IDEAS

    as
    1. Meeusen, Wim & van den Broeck, Julien, 1977. "Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 435-444, June.
    2. Battese, G E & Coelli, T J, 1995. "A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data," Empirical Economics, Springer, vol. 20(2), pages 325-332.
    3. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    manufacturing; formal; informal; organized; unorganized; returns to scale; technical efficiency; cross-sectional data; maximum likelihood estimation; efficiency gap; India; industries;
    All these keywords.

    JEL classification:

    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy

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