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A Comparative Analysis of Efficiency and Productivity of the Indian Pharmaceutical Firms: A Malmquist-Meta-Frontier Approach

Author

Listed:
  • Mainak Mazumdar

    (Institute for Social and Economic Change)

  • Meenakshi Rajeev

    (Institute for Social and Economic Change)

Abstract

This paper examines the technical efficiency, technological gap ratio (TGR) and productivity change of Indian pharmaceutical firms across different groups. The groups are formed based on their size, strategies and product varieties. The study indicates that vertically integrated firms that produce both bulk drug and formulation exhibit higher technological innovation and efficiency. However, in contrast to the popular belief, the analysis reveals that increased export earnings do not necessarily lead to higher efficiency. We also find that installing capital-intensive techniques or imported technology propel the technological growth of firms.

Suggested Citation

  • Mainak Mazumdar & Meenakshi Rajeev, 2009. "A Comparative Analysis of Efficiency and Productivity of the Indian Pharmaceutical Firms: A Malmquist-Meta-Frontier Approach," Working Papers 223, Institute for Social and Economic Change, Bangalore.
  • Handle: RePEc:sch:wpaper:223
    as

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    File URL: http://www.isec.ac.in/WP%20223%20-%20Mainak%20Mazumdar_2.pdf
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    References listed on IDEAS

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    1. Tybout, James & de Melo, Jamie & Corbo, Vittorio, 1991. "The effects of trade reforms on scale and technical efficiency : New evidence from Chile," Journal of International Economics, Elsevier, vol. 31(3-4), pages 231-250, November.
    2. Shawna Grosskopf, 2003. "Some Remarks on Productivity and its Decompositions," Journal of Productivity Analysis, Springer, vol. 20(3), pages 459-474, November.
    3. 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.
    4. Aw, Bee Yan & Chen, Xiaomin & Roberts, Mark J., 2001. "Firm-level evidence on productivity differentials and turnover in Taiwanese manufacturing," Journal of Development Economics, Elsevier, vol. 66(1), pages 51-86, October.
    5. Pradhan, Jaya Prakash, 2007. "New Policy Regime and Small Pharmaceutical Firms in India," MPRA Paper 12335, University Library of Munich, Germany.
    6. George Battese & D. Rao & Christopher O'Donnell, 2004. "A Metafrontier Production Function for Estimation of Technical Efficiencies and Technology Gaps for Firms Operating Under Different Technologies," Journal of Productivity Analysis, Springer, vol. 21(1), pages 91-103, January.
    7. 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.
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    Cited by:

    1. Liao, Chun-Hsiung & Lien, Chun-Yu, 2012. "Measuring the technology gap of APEC integrated telecommunications operators," Telecommunications Policy, Elsevier, vol. 36(10), pages 989-996.
    2. Chiu, Yung-Ho & Lee, Jen-Hui & Lu, Ching-Cheng & Shyu, Ming-Kuang & Luo, Zhengying, 2012. "The technology gap and efficiency measure in WEC countries: Application of the hybrid meta frontier model," Energy Policy, Elsevier, vol. 51(C), pages 349-357.
    3. repec:ssi:jouesi:v:5:y:2017:i:1:p:157-168 is not listed on IDEAS
    4. repec:rej:journl:v:19:y:2016:i:62:p:5-24 is not listed on IDEAS

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