Product Market Competition and Productivity in the Indian Manufacturing Industry

Kato, Atsushi

doi:10.1080/00220380802663575

Cited by 27 publications

(16 citation statements)

References 21 publications

(22 reference statements)

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…The non-frontier parametric approach is known as the production function approach and the frontier non-parametric approach is popularly known as the growth accounting approach. Due to certain limitations, such as the assumption of constant returns to scale and perfect market conditions, the semi-parametric approach, such as the Levinsohn–Petrin (L-P) approach, has become popular over the years to estimate TFP (Blalock & Gertler, 2004; Coricelli, Driffield, Pal & Rolland, 2012; Ghosh, 2009; Kato, 2009; Sharma, 2014; Vial, 2006). Although the literature on the estimation of productivity is quite developed (see Balakrishnan & Pushpangadan, 1998; Beveren, 2012; Bontemps, Robin & Berg, 2000; Good, Nadiri & Sickles, 1996), studies on firm-specific determinants of productivity are scarce.…”

Section: Introductionmentioning

confidence: 99%

Firm Characteristics and Total Factor Productivity: Evidence from Indian Manufacturing Firms

Satpathy

Chatterjee

Mahakud

2017

Margin: The Journal of Applied Economic Research

View full text Add to dashboard Cite

Measurement of the productivity of firms is an important research issue in productivity literature. Over the years, various methods have been developed to measure firm productivity across the globe. But there is no unanimity on the use of methods, and research on the identification of factors which determine productivity has been neglected. In view of these gaps, this study aims to measure total factor productivity (TFP) and tries to identify firm-specific factors which determine productivity of Indian manufacturing companies. The study is based on data of 616 firms from 1998–99 to 2012–13. To measure TFP, the Levinsohn–Petrin (L-P) method has been employed, and the fully modified ordinary least squares (FMOLS) method has been used to identify factors that affect TFP. The results reveal that embodied and disembodied technology plays a crucial role in the determination of productivity overall in manufacturing and other sub-industries. Similarly, the size of firms and intensity of raw material imports are also important for the determination of productivity across the sub-industries. JEL Classification: C14, C33, D24, L60

show abstract

Section: Introductionmentioning

confidence: 99%

Firm Characteristics and Total Factor Productivity: Evidence from Indian Manufacturing Firms

Satpathy

Chatterjee

Mahakud

2017

Margin: The Journal of Applied Economic Research

View full text Add to dashboard Cite

show abstract

“…Bas and Berthou (2011) and Ahsan (2013) find that firms that are more creditworthy and which are in industries that are more oriented toward importing foreign technology and different quality intermediate inputs, experience greater improvements in productivity following trade liberalization. Studies such as Balakrishnan et al (2006), Kato (2009), Loecker et al (2012, Goldberg et al (2010a) also find greater benefits of trade liberalization for those Indian manufacturing firms which continuously diversify their production. Goldberg et al (2010b), Kathuria (2002), Parameswaran (2010) find a positive and significant role of FDI orientation and R&D intensity in realizing the benefits of trade liberalization.…”

Section: Literature Reviewmentioning

confidence: 94%

Impact of Trade Liberalization on Indian Textile Firms: A Panel Analysis

Mukherjee

Chanda

2016

International Trade and International Finance

View full text Add to dashboard Cite

The textile industry is one of India's major industries in terms of output, investment, and employment. It accounted for 4 % of India's GDP, 14 % of total industrial production, and 11 % of total export earnings in 2012. The industry employs around 45 million people, second only to agriculture. A wide range of textile products are produced and exported from India. Exports of most textile products registered high growth during the 2005-2009 period. The industry and its various subsectors have also experienced a significant reduction in domestic tariff and nontariff barriers over the last decade in addition to liberalization in the global market following the phasing out of the MFA. This chapter examines the impact of India's trade liberalization on firm-level performance in terms of profitability, sales revenues, and imports of raw material for different subsectors of India's textile industry over the 2000-2009 period. It makes use of firm-level panel data from the CMIE−Prowess database to determine this impact. It also analyzes how this impact has been influenced by various firm-specific characteristics. The main finding from this analysis is that there has been an improvement in firm-level profitability and sales and an increase in imported raw materials due to domestic trade liberalization. The analysis also shows that the effect has been stronger through the input sourcing channel, mainly due to the removal of quantitative restrictions on inputs used by the textile industry and that larger firms have been able to gain more from trade liberalization. The analysis and methodology used for the textile industry can be used in similar firm-level studies for other important industries in India.

show abstract

“…A number of studies based on firm-level data (Krishna and Mitra [8]; Topalova [9]; Sivadasan [10]; Topalova and Khandelwal [11]) have observed that lowering of tariffs has led to faster productivity growth. Studies (Ray [12]; Siddharthan and Lal [13]; Goldar et al [14]; Banga [15]; Kato [16]) have also shown that import of disembodied technology, Research and Development (R & D) intensity and availability of wider varieties of higher quality imported inputs have favourable impact on productivity growth of Indian firms. However, Balakrishnan and Suresh Babu [17]; Srivastava [18] and Balakrishnan et al [19] could not find evidences of a widespread increase in the rate of productivity growth across all sectors.…”

Section: Review Of Studies On Technical Efficiency In An Era Of Economentioning

confidence: 99%

Impact of Economic Liberalization on Technical Efficiency of Firms: Evidence from India’s Electronics Industry

Chaudhuri¹

2016

TEL

View full text Add to dashboard Cite

The purpose of the paper is to analyze the impact of economic liberalization on technical progress and technical efficiency of electronics hardware manufacturing firms in India. In this study, Translog stochastic frontier production function is estimated in order to measure technical progress and technical efficiency of firms in an era of economic liberalization. The results indicate that electronics hardware manufacturing firms in India have experienced a significant improvement in technical progress during 2002-2010 but the average level of technical efficiency of firms has declined during the same period. The study therefore, concludes that a number of firms have failed to appropriate the benefits of technical progress in India's electronics industry. It has also been observed that implementation of the Information Technology Agreement (ITA) of World Trade Organization (WTO) does not have any significant impact on technical efficiency of firms operating in the electronics industry.

show abstract

Product Market Competition and Productivity in the Indian Manufacturing Industry

Cited by 27 publications

References 21 publications

Firm Characteristics and Total Factor Productivity: Evidence from Indian Manufacturing Firms

Firm Characteristics and Total Factor Productivity: Evidence from Indian Manufacturing Firms

Impact of Trade Liberalization on Indian Textile Firms: A Panel Analysis

Impact of Economic Liberalization on Technical Efficiency of Firms: Evidence from India’s Electronics Industry

Contact Info

Product

Resources

About