Perspectives on the sources of heterogeneity in Indian industry
The authors examine technical efficiency variation across four industrial sectors in India, using a stochastic production frontier technique. The results are comparable to technical efficiency distribution patterns obtained in other countries. The authors examine heterogeneity in firm-level efficiency against internal, firm-level characteristics and against external characteristics (industry and location). The results suggest that managerial effectiveness significantly influences efficiency and that considerable benefits derive from location within established industrial clusters for particular industries. The methodology and findings indicate that the study of industry-specific technical efficiency patterns is a useful analytical tool for tracking domestic firms'response to liberalization and the advance of market forces. An important policy implication of the authors'results: There is considerable room for efficiency gains through better organization and management of production processes and improved supply chain management, even in the highly organized corporate sector. These gains could be achieved by purely internal learning processes with no extra investment in physical plant or equipment, or with the help of outside consultants, or through business alliances with partners from industrial countries (a rising trend). The results also show that greater technical efficiency correlates with better energy use and higher investments in plant management. How firms can be induced to undertake such investments in the"software"of production is an important issue. Liberalization and globalization are likely to bring significant productivity gains even in low-technology industries as managers gear up to meet the challenges of competition.
|Date of creation:||30 Nov 2000|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (202) 477-1234
Web page: http://www.worldbank.org/
More information through EDIRC
References listed on IDEAS
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.:
- Lall, Somik V. & Shalizi, Zmarak & Deichmann, Uwe, 2004.
"Agglomeration economies and productivity in Indian industry,"
Journal of Development Economics,
Elsevier, vol. 73(2), pages 643-673, April.
- Lall, Somik & Shalizi, Zmarak & Deichmann, Uwe, 2001. "Agglomeration economies and productivity in Indian industry," Policy Research Working Paper Series 2663, The World Bank.
- J. Vernon Henderson & Ari Kuncoro & Matthew Turner, 1992.
"Industrial Development in Cities,"
NBER Working Papers
4178, National Bureau of Economic Research, Inc.
- Fujita, Masahisa & Thisse, Jacques-François, 1996.
"Economics of Agglomeration,"
CEPR Discussion Papers
1344, C.E.P.R. Discussion Papers.
- Fujita, Masahisa & Thisse, Jacques-Francois, 1996. "Economics of Agglomeration," Journal of the Japanese and International Economies, Elsevier, vol. 10(4), pages 339-378, December.
- Knorringa, Peter, 1999. "Agra: An Old Cluster Facing the New Competition," World Development, Elsevier, vol. 27(9), pages 1587-1604, September.
- Bell, Martin & Albu, Michael, 1999. "Knowledge Systems and Technological Dynamism in Industrial Clusters in Developing Countries," World Development, Elsevier, vol. 27(9), pages 1715-1734, September.
- Lall, Sanjaya, 1999. "India's Manufactured Exports: Comparative Structure and Prospects," World Development, Elsevier, vol. 27(10), pages 1769-1786, October.
- 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.
- Mal Agarwal, Suraj, 1985. "Electronics in India: Past strategies and future possibilities," World Development, Elsevier, vol. 13(3), pages 273-292, March.
- Jacobsson, Staffan, 1985. "Technical change and industrial policy: The case of computer numerically controlled lathes in Argentina, Korea and Taiwan," World Development, Elsevier, vol. 13(3), pages 353-370, March.
- Glaeser, Edward Ludwig & Kallal, Hedi D. & Scheinkman, Jose A. & Shleifer, Andrei, 1992.
"Growth in Cities,"
3451309, Harvard University Department of Economics.
- GC. Rodrigo, 2000. "East Asia's growth: technology or accumulation?," Contemporary Economic Policy, Western Economic Association International, vol. 18(2), pages 215-227, 04.
When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:2496. 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: (Roula I. Yazigi)
If references are entirely missing, you can add them using this form.