Indian Journal of Industrial Relations: Economics & Social Dev.

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Output & Productivity Growth Decomposition:A Panel Study of Manufacturing Industries in India


Affiliations
1 Dept. of Economics, Midnapore College (Autonomous), Midnapore-721101, W.B., India
2 Vinod Gupta School of Management, Indian Institute of Technology, Kharagpur, India
3 Dept. of Economics With Rural Development, Vidyasagar University, Midnapore, Paschim Medinipur (W.B.), India
     

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This paper decomposes output and productivity growth of thirteen 2-digit manufacturing industries as well as total manufacturing industry in India during 1981-82 to 2010-11. The four attributes of output growth are input growth, adjusted scale effect, technological progress and technical efficiency growth. A stochastic frontier model with a translog production function is used to estimate the growth attributes of the manufacturing industries. The results show that input growth is the major contributor to output growth whereas total factor productivity growth (TFPG) sometimes remains inadequate even though it has a positive and significant effect on output growth. Technological progress is found to be the major contributor to TFPG and the scale effect has become important during recent years.
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  • Output & Productivity Growth Decomposition:A Panel Study of Manufacturing Industries in India

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Authors

Prasanta Kumar Roy
Dept. of Economics, Midnapore College (Autonomous), Midnapore-721101, W.B., India
Purnendu Sekhar Das
Vinod Gupta School of Management, Indian Institute of Technology, Kharagpur, India
Mihir Kumar Pal
Dept. of Economics With Rural Development, Vidyasagar University, Midnapore, Paschim Medinipur (W.B.), India

Abstract


This paper decomposes output and productivity growth of thirteen 2-digit manufacturing industries as well as total manufacturing industry in India during 1981-82 to 2010-11. The four attributes of output growth are input growth, adjusted scale effect, technological progress and technical efficiency growth. A stochastic frontier model with a translog production function is used to estimate the growth attributes of the manufacturing industries. The results show that input growth is the major contributor to output growth whereas total factor productivity growth (TFPG) sometimes remains inadequate even though it has a positive and significant effect on output growth. Technological progress is found to be the major contributor to TFPG and the scale effect has become important during recent years.

References