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Efficiency of Large Scale Manufacturing in Pakistan : A Production Frontier Approach

  • Tariq Mahmood

    (PIDE)

  • Ejaz Ghani
  • Musleh-ud Din

This paper examines the efficiency of the large scale manufacturing sector of Pakistan using the stochastic production frontier approach. A stochastic production frontier is estimated for two periods1995-96 and 2000-01for 101 industries at the 5-digit PSIC. The results show that there has been some improvement in the efficiency of the large scale manufacturing sector, though the magnitude of improvement remains small. The results are mixed at the disaggregated level : whereas a majority of industrial groups have gained in terms of technical efficiency, some industries have shown deterioration in their efficiency levels.

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File URL: http://www.eaber.org/node/22210
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Paper provided by East Asian Bureau of Economic Research in its series Macroeconomics Working Papers with number 22210.

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Date of creation: Jan 2007
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Handle: RePEc:eab:macroe:22210
Contact details of provider: Postal: JG Crawford Building #13, Asia Pacific School of Economics and Government, Australian National University, ACT 0200
Web page: http://www.eaber.org

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  1. Battese, George E. & Corra, Greg S., 1977. "Estimation Of A Production Frontier Model: With Application To The Pastoral Zone Of Eastern Australia," Australian Journal of Agricultural Economics, Australian Agricultural and Resource Economics Society, vol. 21(03), December.
  2. Alvarez, Roberto & Crespi, Gustavo, 2003. " Determinants of Technical Efficiency in Small Firms," Small Business Economics, Springer, vol. 20(3), pages 233-44, May.
  3. Afriat, Sidney N, 1972. "Efficiency Estimation of Production Function," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 13(3), pages 568-98, October.
  4. Battese, George E. & Coelli, Tim J., 1988. "Prediction of firm-level technical efficiencies with a generalized frontier production function and panel data," Journal of Econometrics, Elsevier, vol. 38(3), pages 387-399, July.
  5. Erol Taymaz & G├╝lin Saatci, 1997. "Technical Change and Efficiency in Turkish Manufacturing Industries," Journal of Productivity Analysis, Springer, vol. 8(4), pages 461-475, November.
  6. Jajri, Idris & Ismail, Rahmah, 2006. "Technical efficiency, technological change and total factor productivity growth in Malaysian manufacturing sector," MPRA Paper 1956, University Library of Munich, Germany.
  7. Greene, William H., 1990. "A Gamma-distributed stochastic frontier model," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 141-163.
  8. Stevenson, Rodney E., 1980. "Likelihood functions for generalized stochastic frontier estimation," Journal of Econometrics, Elsevier, vol. 13(1), pages 57-66, May.
  9. Burki, Abid A. & Khan, Mahmood-ul-Hasan, 2004. "Effects of allocative inefficiency on resource allocation and energy substitution in Pakistan's manufacturing," Energy Economics, Elsevier, vol. 26(3), pages 371-388, May.
  10. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
  11. ALVARO ANGERIZ & JOHN McCOMBIE & MARK ROBERTS, 2006. "Productivity, Efficiency And Technological Change In European Union Regional Manufacturing: A Data Envelopment Analysis Approach," Manchester School, University of Manchester, vol. 74(4), pages 500-525, 07.
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