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Efficiency, Technological Progress and Regional Comparative Advantage: A Study of Organised Manufacturing Sector in India

Author

Listed:
  • Mukherjee, Dipa
  • Majumder, Rajarshi

Abstract

Technological upgradation and increasing capital intensity in organised manufacturing sector in India has been championed on grounds of improving productivity, efficiency, and competitiveness. In a developing economy this is a costly proposition due to capital scarcity, and the effect of technological changes on productivity and efficiency levels have to be estimated before taking such policies. This paper seeks to estimate trends in Factor Productivity, Technological Progress, and Technological Efficiency in this sector and examines their relative importance also. Technical Efficiency is observed to be moderate and further declining in the nineties. Substantial disparity exists among regions and product groups regarding Efficiency, Technical Progress and Efficiency changes. It is found that increasing capital intensity has been associated with falling productivity, efficiency, and technological deceleration in the nineties. Wider diffusion rather than greater capital use is thus recommended for productivity rise. Regional efficiency matrix is also prepared so that states can focus on specific areas where they have comparative advantages.

Suggested Citation

  • Mukherjee, Dipa & Majumder, Rajarshi, 2008. "Efficiency, Technological Progress and Regional Comparative Advantage: A Study of Organised Manufacturing Sector in India," MPRA Paper 12758, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:12758
    as

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    File URL: https://mpra.ub.uni-muenchen.de/12758/1/MPRA_paper_12758.pdf
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    References listed on IDEAS

    as
    1. Uma Kambhampati, 2003. "Trade Reforms and the Efficiency of Firms in India," Oxford Development Studies, Taylor & Francis Journals, vol. 31(2), pages 219-233.
    2. K.P. Kalirajan & M.B. Obwona & S. Zhao, 1996. "A Decomposition of Total Factor Productivity Growth: The Case of Chinese Agricultural Growth before and after Reforms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 331-338.
    3. repec:ind:iegddp:28 is not listed on IDEAS
    4. Bulent Unel, 2003. "Productivity Trends in India's Manufacturing Sectors in the Last Two Decades," IMF Working Papers 03/22, International Monetary Fund.
    5. Bauer, Paul W., 1990. "Recent developments in the econometric estimation of frontiers," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 39-56.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Vudayagi Balasubramanyam & N Forsans, 2013. "Why do Indian firms go abroad?," Working Papers 33867210, Lancaster University Management School, Economics Department.

    More about this item

    Keywords

    Productivity; Technical Efficiency; Technological Progress; Organised Manufacturing; Diffusion; Regional Comparative Advantage;

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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