Our Research posts are about the latest academic research being done in the School of Economics. This week:
Productivity, Technical Progress and Scale Efficiency in Indian Manufacturing: Post-Reform Performance
by Prof. E.P.J. Kleynhans – School of Economics, North-West University, Potchefstroom, South Africa &
Dr. V. Pradeep – Economist at the Society for Integrated Coastal Management (SICOM), Ministry of Environment and Forests, New Delhi, INDIA.
This article studies the effects of the economic reforms on the Indian manufacturing industries. Data Envelopment Analysis was used to estimate technical and scale efficiency changes after their reform initiatives. This method decomposes the Malmquist productivity-change index into its various components of technical change progress, the technical efficiency change, pure technical efficiency change and scale efficiency change in a unique way and provides much more information. The estimates suggest, however, that the efficiency of manufacturing industries declined during the post-reform era. The variations are different across industries, and the findings demonstrate the importance of technological progress for improving manufacturing efficiency and productivity in India.
To be published in the Journal of Economic and Financial Sciences, vol. 6(2) in July 2013.