Indian Journal of Economics and Development

Open Access Open Access  Restricted Access Subscription Access

Indian Manufacturing Industry in the Era of Globalization:A Cobb-Douglas Production Function Analysis


Affiliations
1 Agricultural Development Rural Transformation Centre, Institute for Social and Economic Change, Nagarabhavi, Bengaluru-560 072, India
 

Background/Objective: Indian economy has been witnessing an uptrend in growth rate since 1990’s. The main objective of the paper is to investigate the factors influenced on output.

Methods/Statistical analysis: The study used output as a depended variable and number of workers, fixed capital and factories are independent variables are considered for regression analysis. We have used Cobb-Douglas production function. The study used Annual Survey of Industry data, and 69 industries data used for analysis. Also, for the aggregate industry-wise analysis the selected 69 three-digit industries are grouped into 12 industries as mentioned in the ASI two-digit classification.

Findings: Manufacture of Beverages, tobacco and related products, Textile products, Metal products and manufacture of Other Manufacture Industries employment per unit has been growing at a constant rate during study period. The study found workers influenced output in machinery equipment other than transport equipment industry in post globalisation period. As far as fixed capital is concerned, it influenced output growth in pre globalization period. Results shows that, in pre globalization period factories were influenced output growth in Beverages and tobacco and related products, Wood and wood products, Paper and paper products, basic chemical industry and transport industry. As far as factory is concerned, total study period (pre and post globalisation period together) shows that only a few industries viz, manufacture of food products, beverages tobacco and related products, wood and wood products, Basic chemical industry, non-metal products and metal products have reported influence of factory on output. However, in post globalization period, food products, rubber, plastic petroleum, Non-metal products and metal products have reported more influence on output.

Improvement/Application: Government has to give some incentives in regard to fixed capital to those industries not having sufficient level of fixed capital.


Keywords

Globalisation, Indian Manufacturing Industry.
User
Notifications

  • T.A. Bhavana. Small scale units in the era of globalisation, problems and prospects. Economic and Political Weekly.2002; 43(1), 123-132.

  • Busenna Pesala. Impact of globalisation on Indian manufacturing industry’ an unpublished Ph.D, Thesis, submitted to the University of Hyderabad, Hyderabad.2008.

  • C.W.Cobb, PaulH. Douglas. Theory of production. The American Economic Review. 1928;18(1), 139-165.

  • H.BaltagiBadi. Econometric Analysis of Panel Data. 2nd (edn),John wiley& Sons: US.2001.

  • Busenna Pesala, V.Ramesh. Andhra Pradesh manufacturing industry in the era of globalization: a cobb-douglas production function analysis. The IUP Journal of Managerial Economics. 2012;10(1), 7-17.

  • B. Goldar. Employment growth in organized manufacturing in India. Economic and Political Weekly. 2000; 35(14), 1191-1195.


Abstract Views: 317

PDF Views: 199




  • Indian Manufacturing Industry in the Era of Globalization:A Cobb-Douglas Production Function Analysis

Abstract Views: 317  |  PDF Views: 199

Authors

Pesala Peter
Agricultural Development Rural Transformation Centre, Institute for Social and Economic Change, Nagarabhavi, Bengaluru-560 072, India

Abstract


Background/Objective: Indian economy has been witnessing an uptrend in growth rate since 1990’s. The main objective of the paper is to investigate the factors influenced on output.

Methods/Statistical analysis: The study used output as a depended variable and number of workers, fixed capital and factories are independent variables are considered for regression analysis. We have used Cobb-Douglas production function. The study used Annual Survey of Industry data, and 69 industries data used for analysis. Also, for the aggregate industry-wise analysis the selected 69 three-digit industries are grouped into 12 industries as mentioned in the ASI two-digit classification.

Findings: Manufacture of Beverages, tobacco and related products, Textile products, Metal products and manufacture of Other Manufacture Industries employment per unit has been growing at a constant rate during study period. The study found workers influenced output in machinery equipment other than transport equipment industry in post globalisation period. As far as fixed capital is concerned, it influenced output growth in pre globalization period. Results shows that, in pre globalization period factories were influenced output growth in Beverages and tobacco and related products, Wood and wood products, Paper and paper products, basic chemical industry and transport industry. As far as factory is concerned, total study period (pre and post globalisation period together) shows that only a few industries viz, manufacture of food products, beverages tobacco and related products, wood and wood products, Basic chemical industry, non-metal products and metal products have reported influence of factory on output. However, in post globalization period, food products, rubber, plastic petroleum, Non-metal products and metal products have reported more influence on output.

Improvement/Application: Government has to give some incentives in regard to fixed capital to those industries not having sufficient level of fixed capital.


Keywords


Globalisation, Indian Manufacturing Industry.

References