Economic reforms and technical efficiency: Firm level evidence from selected industries in India
AbstractThis paper analyses the performance of the manufacturing firms in some selected industries in terms of their technical efficiency against the background of the industrial and trade policy reforms introduced in India since 1991. A stochastic frontier production function and an associated inefficiency model are used to measure time varying firm specific technical efficiency. We define technical change as the shift of the best practice production frontier and technical inefficiency change as the movement within the best practice technology. The results show that all the industries considered registered a higher rate of technical progress in the post reform period along with a decline in the level of technical efficiency. The effect of change in the policy environment on technical efficiency varies among industries. The study also found that firms' involvement in the international trade through export and import of raw materials and technology has a positive effect on technical efficiency.
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Bibliographic InfoPaper provided by Centre for Development Studies, Trivendrum, India in its series Centre for Development Studies, Trivendrum Working Papers with number 339.
Length: 47 pages
Date of creation: Oct 2002
Date of revision:
India; Manufacturing; Technical Efficiency; Economic Reforms;
Find related papers by 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
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
- O30 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2003-11-23 (All new papers)
- NEP-COM-2003-11-23 (Industrial Competition)
- NEP-EFF-2003-11-23 (Efficiency & Productivity)
- NEP-INO-2003-11-23 (Innovation)
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