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Efficiency of Indian Manufacturing Firms: Textile Industry as a Case Study

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  • Anup Kumar Bhandari

    (Economic Research Unit, Indian Statistical Institute, India)

  • Pradip Maiti

    (Economic Research Unit, Indian Statistical Institute, India)

Abstract

Translog stochastic frontier production functions are fit to firm-level cross-sectional data on India's textile firms for each of five selected years to estimate technical efficiency (TE) of firms. We find that average TE varies between 68 to 84% across these years and that individual TEs vary with firm-specific characteristics such as size and age. Further, public sector firms are found to be relatively less efficient.

Suggested Citation

  • Anup Kumar Bhandari & Pradip Maiti, 2007. "Efficiency of Indian Manufacturing Firms: Textile Industry as a Case Study," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 6(1), pages 71-88, April.
    • Handle: RePEc:ijb:journl:v:6:y:2007:i:1:p:71-88
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    References listed on IDEAS

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    Cited by:

    1. Elitsa R. Banalieva & Michael D. Santoro & Joy Ruihua Jiang, 2012. "Home Region Focus and Technical Efficiency of Multinational Enterprise," Management International Review, Springer, vol. 52(4), pages 493-518, August.
    2. Padmavathi N, 2019. "Technical efficiency of unorganised food processing industry in India: A stochastic frontier analysis," Working Papers 449, Institute for Social and Economic Change, Bangalore.
    3. Coll Serrano, V. & Blasco Blasco, O.Mª., 2009. "Evolución de la eficiencia técnica de la industria textil española en el periodo 1995-2005. Análisis mediante un modelo frontera estocástica/Technical Efficiency In The Textile Industry Of Spain In Th," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 27, pages 779(32á)-77, Diciembre.
    4. Tantri, Malini L., 2014. "Promises and paradoxes of SEZs expansion in India," Working Papers 331, Institute for Social and Economic Change, Bangalore.
    5. Tsvetkova, Anna, 2021. "Technical efficiency trends of Russian firms in 2013–2018," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 63, pages 91-116.
    6. Anup Kumar Bhandari, 2021. "Withdrawal of the multifibre agreement and Indian textile industry: Concerns, efforts, and achievements," Review of Development Economics, Wiley Blackwell, vol. 25(3), pages 1397-1436, August.
    7. Anup Kumar Bhandari, 2010. "Global Crisis, Environment Volatility and Expansion of Tthe Indian Leather Industry," Working Papers id:2500, eSocialSciences.
    8. Md. Shakil Ahmed & M. Daud Ahmed, 2013. "Efficiency Variation of Manufacturing Firms: A Case Study of Seafood Processing Firms in Bangladesh," Review of Economics & Finance, Better Advances Press, Canada, vol. 3, pages 45-56, May.
    9. Valiyattoor, Vipin & Bhandari, Anup Kumar, 2020. "Outsourcing and firm performance nexus: An analysis using the conventional and panel double-bootstrap procedure," Research in International Business and Finance, Elsevier, vol. 54(C).
    10. Ku-Hsieh Chen & Pei-Hwa Chen & Julie Ann Elston & Yingchao Zhang, 2023. "Are family firms more efficient? Revisiting the U-shaped curve of scale and efficiency," Small Business Economics, Springer, vol. 61(3), pages 983-1008, October.
    11. Anup Bhandari & Pradip Maiti, 2012. "Efficiency of the Indian leather firms: some results obtained using the two conventional methods," Journal of Productivity Analysis, Springer, vol. 37(1), pages 73-93, February.
    12. Arpita Ghose & Chandrima Chakraborti, 2013. "The Relative Role of Imports and Exports in Explaining Productivity of Indian Bio-Pharmaceutical Firms: Evidence from Non Parametric Data Envelopment Analysis," Foreign Trade Review, , vol. 48(2), pages 165-201, May.

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    More about this item

    Keywords

    textile industry; technical efficiency; stochastic frontier; Cobb Douglas production function; translog production function;
    All these keywords.

    JEL classification:

    • C12 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Hypothesis Testing: General
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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