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The Relative Role of Imports and Exports in Explaining Productivity of Indian Bio-Pharmaceutical Firms: Evidence from Non Parametric Data Envelopment Analysis

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  • Arpita Ghose
  • Chandrima Chakraborti

Abstract

This article estimates total factor productivity growth of eighteen Indian bio-pharmaceutical firms for the period 2000–2009, using Malmquist Productivity Index (MPI) and non-parametric, Data-Envelopment-Approach. The measured MPI is decomposed to separate the contributions of technical change, technical efficiency change and scale efficiency change of each of the firm. The article also explains for determinants of productivity taking into account the role of net exports, Research and Development, Advertisement and Marketing intensity, age and size of the firm. Estimation results suggest that most of the firms show improved performance of productivity growth rate during this post liberalization period. A second stage panel regression reveals that net exports have positive role in explaining MPI of the firms, assigning greater role to exports as compared to imports in fostering productivity. The other positive and significant determinants of MPI are Research and Development intensity, Advertisement intensity, the age and the size of the firm.

Suggested Citation

  • 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.
    • Handle: RePEc:sae:fortra:v:48:y:2013:i:2:p:165-201
    DOI: 10.1177/0015732513481657
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    More about this item

    Keywords

    Total factor productivity growth; net exports; R&D and Advertisement; Indian bio-pharmaceutical firms; Data-Envelopment Analysis;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology; Plastics
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General

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