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Technical Efficiency in the Indian Textiles Industry: A Nonparametric Analysis of Firm-Level Data


  • Anup Kumar Bhandari

    (Indian Statistical Institute, Kolkata)

  • Subhash C. Ray

    (University of Connecticut)


The Indian textiles industry is now at the crossroads with the phasing out of quota regime that prevailed under the Multi-Fiber Agreement (MFA) until the end of 2004. In the face of a full integration of the textiles sector in the WTO, maintaining and enhancing productive efficiency is a precondition for competitiveness of the Indian firms in the new liberalized world market. In this paper we use data obtained from the Annual Survey of Industries for a number of years to measure the levels of technical efficiency in the Indian textiles industry at the firm level. We use both a grand frontier applicable to all firms and a group frontier specific to firms from any individual state, ownership, or organization type in order to evaluate their efficiencies. This permits us to separately identify how locational, proprietary, and organizational characteristics of a firm affect its performance.

Suggested Citation

  • Anup Kumar Bhandari & Subhash C. Ray, 2007. "Technical Efficiency in the Indian Textiles Industry: A Nonparametric Analysis of Firm-Level Data," Working papers 2007-49, University of Connecticut, Department of Economics.
  • Handle: RePEc:uct:uconnp:2007-49

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    References listed on IDEAS

    1. Subhash Ray & Kankana Mukherjee, 2003. "Does the Presence of Surplus Labor Hinder Production in Indian Manufacturing?," Working papers 2003-48, University of Connecticut, Department of Economics.
    2. D.S. Prasada Rao & Christopher J. O'Donnell & George E. Battese, 2003. "Metafrontier Functions for the Study of Inter-regional Productivity Differences," CEPA Working Papers Series WP012003, School of Economics, University of Queensland, Australia.
    3. 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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    Cited by:

    1. Anup Kumar Bhandari & Vipin V, 2018. "Does Export Intensity Affect Firm Performance? Evidence from Basic Metal Industry in India," Working Papers id:12767, eSocialSciences.
    2. Anup Kumar Bhandari, 2010. "Global Crisis, Environment Volatility and Expansion of Tthe Indian Leather Industry," Working Papers id:2500, eSocialSciences.

    More about this item


    Data Envelopment Analysis; Meta-Frontier; Technology Closeness ratio;

    JEL classification:

    • L67 - Industrial Organization - - Industry Studies: Manufacturing - - - Other Consumer Nondurables: Clothing, Textiles, Shoes, and Leather Goods; Household Goods; Sports Equipment
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis

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