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Technical Efficiency And Its Dynamics In Indian Manufacturing: An Inter State Analysis

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Author Info
Kankana Mukherjee (Department of Management ,Worcester Polytechnic Institute)
Subhash C. Ray (Department of Economics, University of Connecticut)

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Abstract

This paper analyzes state level data from the manufacturing sector in India for the period 1986-87 to 1999-00 to study the efficiency dynamics of a ‘typical’ firm in individual states during the pre- and post reform years. Using the non-parametric method of Data Envelopment Analysis we utilize super-efficiency models to rank the states in terms of their performance and investigate the dynamics of the efficiency rankings over time. We find no major change in the efficiency ranking of states after the reforms. Nor is there any evidence of convergence in the distribution of efficiency in the post-reform period.

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Publisher Info
Article provided by Department of Economics, Delhi School of Economics in its journal Indian Economic Review.

Volume (Year): 40 (2005)
Issue (Month): 2 (December)
Pages: 101-125
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Handle: RePEc:dse:indecr:v:40:y:2005:i:2:p:101-125

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Related research
Keywords: super efficiency; convergence; Markov chains.;

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Find related papers by JEL classification:
D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity
L6 - Industrial Organization - - Industry Studies: Manufacturing

References listed on IDEAS
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  1. Quah, Danny, 1993. "Galton's Fallacy and Tests of the Convergence Hypothesis," CEPR Discussion Papers 820, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  2. Varian, Hal R, 1984. "The Nonparametric Approach to Production Analysis," Econometrica, Econometric Society, vol. 52(3), pages 579-97, May. [Downloadable!] (restricted)
  3. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November. [Downloadable!] (restricted)
  4. Lichtenberg, Frank R, 1994. "Testing the Convergence Hypothesis," The Review of Economics and Statistics, MIT Press, vol. 76(3), pages 576-79, August. [Downloadable!] (restricted)
  5. Mitra, Arup & Varoudakis, Aristomene & Veganzones-Varoudakis, Marie-Ange, 2002. "Productivity and Technical Efficiency in Indian States' Manufacturing: The Role of Infrastructure," Economic Development and Cultural Change, University of Chicago Press, vol. 50(2), pages 395-426, January.
  6. Barro, R.J. & Sala-I-Martin, X., 1991. "Convergence Across States and Regions," Papers 629, Yale - Economic Growth Center.
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