An Application of Economic Capacity Utilization to the Measurement of Total Factor Productivity Growth: Empirical Evidence from Indian Fertilizer Industry
This paper attempts to measure the productivity performance of the Indian fertilizer industry at the aggregate level, with adjustment for variations in capacity utilization during the period from 1979-80 to 2003-04. Using a translog specification, our econometric analysis reveals a decelerating trend in total factor productivity growth resulting in negative impact of economic reforms on the Indian fertilizer industry. The study also indicates a declining trend of economic capacity utilization suggesting the adverse impact of liberalization after the mid 90’s, due to slow increases in actual output; this probably results from stagnated demand and rapid expansion of capacity as a result of the abolition of the licensing rule consequent to economic reforms. Total output growth in the Indian fertilizer industry is found to be mainly as a result of inputaccumulation rather than productivity driven. The analysis reveals that a correction for capacity utilization mitigates the variations in total factor productivity growth.
Volume (Year): (2011)
Issue (Month): 1 (March)
|Contact details of provider:|| Postal: Casa Academiei, Calea 13, Septembrie nr.13, sector 5, Bucureşti 761172|
Phone: 004 021 3188148
Fax: 004 021 3188148
Web page: http://www.ipe.ro/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Catherine J. Morrison, 1985.
"On the Economic Interpretation and Measurement of Optimal Capacity Utilization with Anticipatory Expectations,"
Review of Economic Studies,
Oxford University Press, vol. 52(2), pages 295-309.
- Catherine J. Morrison, 1985. "On the Economic Interpretation and Measurement of Optimal Capacity Utilization with Anticipatory Expectations," NBER Working Papers 1536, National Bureau of Economic Research, Inc.
- Pravin Krishna & Devashish Mitra, 1996.
"Trade Liberalization, Market Discipline and Productivity Growth: New Evidence From India,"
96-8, Brown University, Department of Economics.
- Krishna, Pravin & Mitra, Devashish, 1998. "Trade liberalization, market discipline and productivity growth: new evidence from India," Journal of Development Economics, Elsevier, vol. 56(2), pages 447-462, August.
- Catherine J. Morrison, 1985.
"Productivity Measurement with Nonstatic Expectations and Varying Capacity Utilization: An Integrated Approach,"
NBER Working Papers
1561, National Bureau of Economic Research, Inc.
- Morrison, Catherine J., 1986. "Productivity measurement with non-static expectations and varying capacity utilization : An integrated approach," Journal of Econometrics, Elsevier, vol. 33(1-2), pages 51-74.
- J. R. Norsworthy & Michael J. Harper & Kent Kunze, 1979. "The Slowdown in Productivity Growth: Analysis of Some Contributing factors," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 10(2), pages 387-422.
- Lawrence R. Klein, 1958. "The Measurement of Capacity," Cowles Foundation Discussion Papers 49, Cowles Foundation for Research in Economics, Yale University.
- Jagdish N. Bhagwati & T. N. Srinivasan, 1975. "Foreign Trade Regimes and Economic Development: India," NBER Books, National Bureau of Economic Research, Inc, number bhag75-1.
- Berndt, Ernst R. & Fuss, Melvyn A., 1986. "Productivity measurement with adjustments for variations in capacity utilization and other forms of temporary equilibrium," Journal of Econometrics, Elsevier, vol. 33(1-2), pages 7-29.
- Hulten, Charles R., 1986. "Productivity change, capacity utilization, and the sources of efficiency growth," Journal of Econometrics, Elsevier, vol. 33(1-2), pages 31-50.
- Srinivasan, P.V., 1992. "Determinants of Capacity Utilization in Indian Industries," Papers 71, Indira Gandhi Institute of Development Research-.
- Jorgenson, Dale W, 1988. "Productivity and Postwar U.S. Economic Growth," Journal of Economic Perspectives, American Economic Association, vol. 2(4), pages 23-41, Fall.
- Berndt, Ernst R & Morrison, Catherine J, 1981. "Capacity Utilization Measures: Underlying Economic Theory and an Alternative Approach," American Economic Review, American Economic Association, vol. 71(2), pages 48-52, May.
- J. M. Cassels, 1937. "Excess Capacity and Monopolistic Competition," The Quarterly Journal of Economics, Oxford University Press, vol. 51(3), pages 426-443.
When requesting a correction, please mention this item's handle: RePEc:rjr:romjef:v::y:2011:i:1:p:125-142. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Corina Saman)
If references are entirely missing, you can add them using this form.