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

Author

Listed:
  • Kankana Mukherjee

    (Department of Management ,Worcester Polytechnic Institute)

  • Subhash C. Ray

    (Department of Economics, University of Connecticut)

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.

Suggested Citation

  • Kankana Mukherjee & Subhash C. Ray, 2005. "Technical Efficiency And Its Dynamics In Indian Manufacturing: An Inter State Analysis," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 40(2), pages 101-125, December.
  • Handle: RePEc:dse:indecr:v:40:y:2005:i:2:p:101-125
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    References listed on IDEAS

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    1. Per Andersen & Niels Christian Petersen, 1993. "A Procedure for Ranking Efficient Units in Data Envelopment Analysis," Management Science, INFORMS, vol. 39(10), pages 1261-1264, October.
    2. Lichtenberg, Frank R, 1994. "Testing the Convergence Hypothesis," The Review of Economics and Statistics, MIT Press, vol. 76(3), pages 576-579, August.
    3. R. D. Banker & A. Charnes & W. W. Cooper, 1984. "Some Models for Estimating Technical and Scale Inefficiencies in Data Envelopment Analysis," Management Science, INFORMS, vol. 30(9), pages 1078-1092, September.
    4. Robert J. Barro & Xavier Sala-i-Martin, 1991. "Convergence across States and Regions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 22(1), pages 107-182.
    5. Quah, Danny, 1993. " Galton's Fallacy and Tests of the Convergence Hypothesis," Scandinavian Journal of Economics, Wiley Blackwell, vol. 95(4), pages 427-443, December.
    6. Varian, Hal R, 1984. "The Nonparametric Approach to Production Analysis," Econometrica, Econometric Society, vol. 52(3), pages 579-597, May.
    7. 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.
    8. Sala-i-Martin, Xavier, 1994. "Cross-sectional regressions and the empirics of economic growth," European Economic Review, Elsevier, vol. 38(3-4), pages 739-747, April.
    9. Barro, Robert J & Sala-i-Martin, Xavier, 1992. "Convergence," Journal of Political Economy, University of Chicago Press, vol. 100(2), pages 223-251, April.
    10. Mei Xue & Patrick T. Harker, 2002. "Note: Ranking DMUs with Infeasible Super-Efficiency DEA Models," Management Science, INFORMS, vol. 48(5), pages 705-710, May.
    11. 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.
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    Citations

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    Cited by:

    1. Mazumdar, Mainak & Rajeev, Meenakshi & Ray, Subhash C., 2012. "Sources of Heterogeneity in the Efficiency of Indian Pharmaceutical Firms," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 47(2), pages 191-221.
    2. Anup Kumar Bhandari & Pradip Maiti, 2007. "Efficiency of Indian Manufacturing Firms: Textile Industry as a Case Study," International Journal of Business and Economics, College of Business and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 6(1), pages 71-88, April.
    3. Dipa Mukherjee & Rajarshi Majumder, 2007. "Efficiency, technological progress and regional comparative advantage: a study of the organized manufacturing sector in India," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 14(2), pages 23-54, December.
    4. Anup Kumar Bhandari, 2010. "Global Crisis, Environment Volatility and Expansion of Tthe Indian Leather Industry," Working Papers id:2500, eSocialSciences.
    5. Muhammad AFZAL & Maryam AYAZ, 2013. "Efficiency of Food Sector of Pakistan-A Dea Analysis," Asian Journal of Empirical Research, Asian Economic and Social Society, vol. 3(10), pages 1310-1330, October.
    6. Tariq Mahmood & Ejaz Ghani & Musleh Ud Din, 2015. "Are Our Export-Oriented Industries Technically More Efficient?," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 54(2), pages 97-121.
    7. 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.
    8. Arnab K. Deb & Subhash C. Ray, 2013. "Economic Reforms and Total Factor Productivity Growth of Indian Manufacturing: An Inter-State Analysis," Working papers 2013-04, University of Connecticut, Department of Economics, revised Apr 2013.

    More about this item

    Keywords

    super efficiency; convergence; Markov chains.;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

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