Indian Journal of Industrial Relations: Economics & Social Dev.

Open Access Open Access  Restricted Access Subscription Access
Open Access Open Access Open Access  Restricted Access Restricted Access Subscription Access

Estimation & Decomposition of Productivity Change in Food, Beverages & Tobacco Products Using Frontier Approaches


Affiliations
1 Midnapore College (Autonomous), Midnapore 721101, India
2 Dept. of Economics with Rural Development, Vidyasagar University, Midnapore, India
3 Vinod Gupta School of Management, IIT, Kharagpur, India
     

   Subscribe/Renew Journal


The study estimates and decomposes the sources of productivity change of the 4- digit food, beverages and tobacco industries in India during 1998/99 – 2017/18, pre-economic crises period (1998-99 to 2007-08) and post-economic crises period (2008-09 to 2017-18) using Data Envelop Analysis (DEA) and Stochastic Frontier Approach (SFA). The study decomposes the source s of TFPG into technological change (TP), technical efficiency change (TEC) and economic scale change (SC). It was found that the growth rates of TFP in most of the 4-digit industries of food, beverages and tobacco products in India have declined during the post financial meltdown period (2008/09 – 2017/18) and the decline in TFPG of them during the period is mainly accounted for by the decline in technological progress (TP).
Subscription Login to verify subscription
User
Notifications
Font Size


  • Aigner, D.J., C.A.K. Lovell & P. Schmidt (1977), “Formulation and Estimation of Stochastic Frontier Models,” Journal of Econometrics, 6: 21–37

  • Bauer, P. W. (1990), “Decomposing TFP Growth in the Presence of Cost Inefficiency, Nonconstant Returns to Scale, and Technical Progress,” Journal of Productivity Analysis 1: 287-99

  • Caves, D., Christensen L. & Diewert, W.E. (1982), “The Economic Theory of Index Numbers and the Measurement of Input, Output, and Productivity”, Econometrica, 50: 1393-1414

  • Coelli, T.J. (1996), “A Guide to FRONTIER Version 4.1: A Computer Program for Stochastic Frontier Production and Cost Function Estimation”, CEPA Working Paper, 7/96, Dept. of Econometrics, University of New England,

  • Armidale Coelli, T. J., D. S. Prasada Rao & G.E. Battese (1998), An Introduction to Efficiency and Productivity Analysis, Kluwer Academic Publisher, Boston, M.A., USA

  • Deb A.K. & Ray S.C. (2014), “Total Factor Productivity Growth in Indian Manufacturing: A Biennial Malmquist Analysis of Interstate Data”, Indian Economic Review, 49 (1): 1-25

  • Fare, R., S. Grosskopf, M. Norris & Z. Zhang (1994), “Productivity Growth, Technical Progress and Eûciency Change in Industrialized Countries”, American Economic Review, 84 (1): 66-83

  • Goldsmith, Raymond W. (1951), “Perpetual Inventory of National Wealth,” Studies in Income and Wealth, Vol.14, NBER, New York

  • Heshmati, Almas & Kumbhakar, Subal C. (2010), “Technical Change and Total Factor Productivity Growth: The Case of Chinese Provinces ,” TEMEP Di scussion Papers 2010-54, Seoul National University; Technology Management, Economics, and Policy Program (TEMEP), revised Feb 2010

  • Joshi, R.N. & Singh, S.P. (2010), “Estimation of Total Factor Productivity in the Indian Garment Industry,”Journal of Fashion Marketing and Management, 14(1): 145-60

  • Kalirajan, K. P., M. B. Obwona & S. Zhao (1996), “A Decomposition of Total Factor Productivity Growth: The Case of Chinese Agricultural Growth Before and After Reforms”, American Journal of Agricultural Economics, 78: 331-38

  • Kim, S & G. Han (2001), “A Decomposition of Total Factor Productivity Growth in Korean Manufacturing Industries: A Stochastic Frontier Approach,” Journal of Productivity Analysis, 16(3):269-81

  • Kumar, Surender (2004), “Decomposition of Total Factor Productivity Growth: A Regional Analysis of Indian Industrial Manufacturing Growth,” Working Paper 04/22, National Institute of Public Finance and Policy, New Delhi

  • Kumbhakar, S.C. & Lovell, C.A.K. (2000), Stochastic Frontier Analysis, Cambridge University Press, Cambridge, U.K

  • Liu, Wanghui & Huang Bing (2009), “A Decomposition of Total Factor Productivity Growth in China’s Steel Industry: A Stochastic Frontier Approach” International Conference on Business Intelligence and Financial Engineering, Beijing, 10.1109/ BIFE-2009-203.

  • Mahadevan, R. (2001), “Assessing the Output and Productivity Growth of Malaysia’s Manufacturing Sector”,Journal of Asian Economics, 12(4):587-97

  • Mahadevan, R. (2002), “A DEA Approach to Understanding the Productivity Growth of Malaysia’s Manufacturing Industries”,Asia Pacific Journal of Management, 19(4): 587600

  • Meeusen, W. & J. Van den Broeck (1977), “Efficiency Estimation Form Cobb-Douglas Production Function with Composed Error”, International Economic Review,18 (2):43544

  • Nishimizu, M. & J. M. Page (1982), “Total Factor Productivity Growth, Technical Progress and Technical Efficiency Change: Dimensions of Productivity Change in Yugoslavia, 1965–78,” The Economic Journal, 92: 929-36

  • Njuki, Eric, Boris E. Bravo-Ureta& Christopher J. O’Donnell (2018), “Decomposing Agricultural Productivity Growth Using a Randomparameters Stochastic Production Frontier,” Empirical Economics, 57 (3): 1-22

  • Ray, Subhash. C. (1997), “Regional Variation in Productivity Growth in Indian Manufacturing: A Non-parametric Analysis,” Journal of Quantitative Economics, 13: 73-94.

  • Ray, Subhash C. (2002), “Did India’s Economic Reforms Improve Efficiency and Productivity? A Non-parametric Analysis of the Initial Evidence from Manufacturing”, Indian Economic Review, 37: 23-57

  • Ray, Subhash C. (2004), Data Envelopment Analysis: Theory and Techniques for Economics and Operations Research, Cambridge University Press

  • Roy P. K., P. S. Das & Pal M.K. (2017), “Decomposition of Total Factor Productivity Growth of the 2-Digit Manufacturing Industries in West Bengal: A Stochastic Frontier Approach”, Arthaniti, XVI (1&2):101-24

  • Roy P. K. & P. S. Das (2018), “Productivity Growth Decomposition in the Manufacturing Industries of Food, Beverages and Tobacco Products in India: A Stochastic Frontier Approach”, Arthashastra: Indian Journal of Economics & Research, 7 (1):37-57

  • Sharma, S.C., K. Sylwester & H. Margono (2007), “Decomposition of Total Factor Productivity Growth in U.S. States,” Quarterly Review of Economics and Finance, 47(2):215–41


Abstract Views: 122

PDF Views: 0




  • Estimation & Decomposition of Productivity Change in Food, Beverages & Tobacco Products Using Frontier Approaches

Abstract Views: 122  |  PDF Views: 0

Authors

Prasanta Kumar Roy
Midnapore College (Autonomous), Midnapore 721101, India
Devkumar Nayek
Midnapore College (Autonomous), Midnapore 721101, India
Sebak Kumar Jana
Dept. of Economics with Rural Development, Vidyasagar University, Midnapore, India
Purnendu Sekhar Das
Vinod Gupta School of Management, IIT, Kharagpur, India

Abstract


The study estimates and decomposes the sources of productivity change of the 4- digit food, beverages and tobacco industries in India during 1998/99 – 2017/18, pre-economic crises period (1998-99 to 2007-08) and post-economic crises period (2008-09 to 2017-18) using Data Envelop Analysis (DEA) and Stochastic Frontier Approach (SFA). The study decomposes the source s of TFPG into technological change (TP), technical efficiency change (TEC) and economic scale change (SC). It was found that the growth rates of TFP in most of the 4-digit industries of food, beverages and tobacco products in India have declined during the post financial meltdown period (2008/09 – 2017/18) and the decline in TFPG of them during the period is mainly accounted for by the decline in technological progress (TP).

References