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Technical Efficiency in Indian Modern Small Scale Sector: An Application of Frontier Production function

Author

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  • T. A. Bhavani

    (Institute of Economic Growth)

Abstract
The present study attempts to investigate the efficiency of four 4-digit level industries of metal products group belonging to the modern small scale sector. Based on firmlevel data, we attempt to measure the technical efficiency of the selected industries using translog production frontier with three inputs viz., capital, labour and materials. In order to see the sensitivity of efficiency estimates to the distribution selected in the frontier model, we consider three widely used distributions namely, the Gamma, the Exponential and the Half-Normal. The results show high efficiency levels for the four selected industries.

Suggested Citation

  • T. A. Bhavani, 1991. "Technical Efficiency in Indian Modern Small Scale Sector: An Application of Frontier Production function," Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 26(2), pages 149-166, July.
    • Handle: RePEc:dse:indecr:v:26:y:1991:i:2:p:149-166
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    Cited by:

    1. James R. Tybout, 2000. "Manufacturing Firms in Developing Countries: How Well Do They Do, and Why?," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 11-44, March.
    2. Ritwik Mazumder & Maniklal Adhikary, 2010. "Measuring Technical Efficiency in the Indian Automobile Industry," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 11(1), pages 53-67, March.
    3. Nigel L. Driffield & Uma S. Kambhampati, 2003. "Trade Liberalization and the Efficiency of Firms in Indian Manufacturing," Review of Development Economics, Wiley Blackwell, vol. 7(3), pages 419-430, August.
    4. Tantri, Malini L., 2014. "Promises and paradoxes of SEZs expansion in India," Working Papers 331, Institute for Social and Economic Change, Bangalore.
    5. Sanu, Md Sahnewaz, 2018. "The Contribution of MSMEs in India’s Total Exports and GDP Growth: Evidence from Cointegration and Causality Tests," MPRA Paper 107892, University Library of Munich, Germany, revised Jan 2019.
    6. Anup Kumar Bhandari & Pradip Maiti, 2007. "Efficiency of Indian Manufacturing Firms: Textile Industry as a Case Study," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 6(1), pages 71-88, April.
    7. Anup Kumar Bhandari, 2010. "Global Crisis, Environment Volatility and Expansion of Tthe Indian Leather Industry," Working Papers id:2500, eSocialSciences.
    8. Ramcharran, Harri, 2017. "Bank lending to small business in India: Analyzing productivity and efficiency," The Quarterly Review of Economics and Finance, Elsevier, vol. 65(C), pages 16-24.
    9. Karamat Ali & Abdul Hamid, 1996. "Technical Change, Technical Efficiency, and Their Impact on Input Demand in the Agricultural and Manufacturing Sectors of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 35(3), pages 215-228.
    10. Anup Bhandari & Pradip Maiti, 2012. "Efficiency of the Indian leather firms: some results obtained using the two conventional methods," Journal of Productivity Analysis, Springer, vol. 37(1), pages 73-93, February.

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