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Microeconomic and Macroeconomic Determinants of Efficiency: Evidence from Indian Manufacturing Sub-Sectors

Authors:

Sumit Kumar Maji ,

The University of Burdwan, IN
About Sumit Kumar
Department of Commerce
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Arindam Laha,

The University of Burdwan, IN
About Arindam
Department of Commerce
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Debasish Sur

The University of Burdwan, IN
About Debasish
Department of Commerce
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Abstract

In this paper an effort was made to evaluate the level of efficiency of the firms that belong to the selected manufacturing sub-sectors in India for the period 1999-2000 to 2013-2014 using Stochastic Frontier Analysis. Subsequently, the microeconomic and macroeconomic determinants of efficiency were analysed applying Panel Censored Tobit Regression Model. The study revealed that Electrical Equipment sub-sector was found to be the most efficient sector followed by the sub-sectors Auto Parts and Equipment, Pharmaceutical and Biotechnology, Chemicals, Textile, Food products and Steel respectively. The study also showed that leverage, size of the firm, age of the firm, openness of the firm (microeconomic) and inflation (macroeconomic) made notable contribution towards changing the level of efficiency of manufacturing firms during the study period. However, their contributions were not the same in all sub-sectors under study.
How to Cite: Maji, S.K., Laha, A. and Sur, D., 2020. Microeconomic and Macroeconomic Determinants of Efficiency: Evidence from Indian Manufacturing Sub-Sectors. Colombo Business Journal, 11(1), pp.47–82. DOI: http://doi.org/10.4038/cbj.v11i1.57
Published on 30 Jun 2020.
Peer Reviewed

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