An Examination of Technical Efficiency of MSMEs Industries in Haryana: A Case Study of Faridabad District

Pooja Kumari; Shreedhar Satyakam

doi:10.56595/lbr.v3i2.25

Authors

Pooja Kumari
Research Scholar Department of Economics, Mahatma Gandhi Central University, Bihar
Shreedhar Satyakam
Assistant Professor, Department of Economics, University of Allahabad, U.P.

DOI:

https://doi.org/10.56595/lbr.v3i2.25

Keywords:

Technical efficiency; MSMEs; Manufacturing Industries, Production, SFA, Faridabad

Abstract

India's economy's micro, small, and medium-sized enterprises (MSME) sector produce several goods. One of the most accurate ways to characterize the Industrial Sector is by its technical efficiency, which allows it to sustain a high level of manufacturing production. An investigation of the productivity and efficiency of micro, small, and medium-sized firms (MSMEs) in the industrial sector of Faridabad, Haryana, is carried out using parametric frontier analysis. Within the context of his essay on efficiency evaluation, which was published in 1957, Farrell presented various approaches for examining productivity and efficiency. The function that determines the creation of the stochastic frontier. We use a multistage estimation technique that incorporates four distinct error components to arrive at reasonable estimates. From 2016 through 2022, the data from the Ministry of MSMEs and the organization that is part of the state government were utilized. An investigation into the machinery and equipment that is utilized by micro, small, and medium-sized firms will be carried out as part of this study.

Downloads

Download data is not yet available.

References

Ahluwalia, I.J. (1991), Productivity and Growth in Indian Manufacturing, Oxford University Press,

Aigner, Dennis, C. A. Knox Lovell, and Peter Schmidt (1977), Formulation and Estimation of Stochastic Frontier Production Function Models. Journal of Econometrics 6 , 21-37

Berlemann, M. and Wesselhoft, J.-E. (2014), “Estimating aggregate capital stocks using the perpetual inventory method-a survey of previous implementations and new empirical evidence for 103 countries”, Review of Economics, Vol. 65 No. 1, pp. 1-34.

Comwell, C; P. Schmidt; and R.C. Sickles. 1990. "Production Frontiers with Cross-Sectional and Time-Series Variation in Efficiency Levels." Journal of Econometrics 46, nos. 1-2: 185-200.

Dholakia, R.H. and Dholakia (1994), “Total factor productivity growth in Indian manufacturing”,

Diaz, M. A. and R. Sanchez (2008) Firm Size and Productivity in Spain: A Stochastic Frontier Analysis. Small Business Economics 30, 315-323. Economic and Political Weekly, Vol. 29 No. 53, pp. 342-344.

Farrell, M.J. (1957). "The Measurement of Productive Efficiency." Journal of the Royal Statistical Society Series A, 120, Part 3, 253-281.

Goldar, B. (1986), Productivity Growth in Indian Industry, Allied Publishers, New Delhi.

Hossain, M.A. and Karunaratne, N.D. (2004), “Trade liberalization and technical efficiency: evidence from Bangladesh manufacturing industries”, The Journal of Development Studies, Vol. 40 No. 3, pp. 87-114.

Jorgenson, D.W. and Griliches, Z. (1967), “The explanation of productivity change”, Review of Economic Studies, Vol. 34 No. 3, pp. 349-383.

Kim, S., and Han, G., (2001), A Decomposition of Total Factor Productivity Growth in Korean Manufacturing Industries: A Stochastic Frontier Approach, Journal of Productivity Analysis, Vol. 16, No. 3, pp. 269-281, https://www.jstor.org/stable/41770065.

Kumbhakar, S.C. 1990. "Production Frontiers, Panel Data and Time-Varying Technical Efficiency." Journal of Econometrics 46, no. 1-2: 201-211.

Kumbhakar, S.C; S. Ghosh; and J.T. McGuckin. 1991. "A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in U.S. Dairy Farms." Journal of Business and Economics Statistics 9, no. 3: 279-286.

Majumdar, S.K. (1996), “Fall and rise of productivity in Indian industry: has economic liberalization had any impact?”, Economic and Political Weekly, Vol. 31 No. 48, pp. M46-M53.

Majumdar, S.K. (1996), “Fall and rise of productivity in Indian industry: has economic liberalization had any impact?”, Economic and Political Weekly, Vol. 31 No. 48,

Meeusen, W. and J. van den Broeck. (1977). "Efficiency Estimation from Cobb-Douglas Production Functions with Composite Error." International Economic Review 18, 435-444. New Delhi.

Parida, C. P., Pradhan, C. K., (2006), Productivity and efficiency of labour intensive manufacturing industries in India: An empirical analysis, International Journal of Development Issues, Vol. 15, No. 2, pp. 130- 152.

Pitt, M.M., and L.-F. Lee. 1981. "The Measurement and Sources of Technical Inefficiency in the Indonesian Weaving Industry." Journal of Development Economics 9, no. 1:43-64.

a. pp. M46-M53.

Rao, J.M. (1996), “Manufacturing productivity growth: method and measurement”, Economic and Political Weekly, Vol. 31 No. 44, pp. 2927-2936.

Ray, S.C. (2002), “Did India’s economic reforms improve efficiency and productivity? A non-parametric analysis of the initial evidence from manufacturing”, Indian Economic

a. Review, Vol. 37 No. 1, pp. 23-57.

Robin C. Sickles and Buruc Cigerli* (2009), Krugman and Young Revisited: A survey of the sources of productivity growth in a world with less constraints, Seoul Journal of Economics, Vol. 22, No. 1.

Roy, K. P., Das, S. P., and Pal, K. M., (2016) Productivity Growth of Indian Manufacturing: Panel Estimation of Stochastic Production Frontier, Indian Journal of Industrial Relations , July 2016, Vol. 52, No. 1, pp. 71-86, https://www.jstor.org/stable/43974599.

Sharma, R.K., Leung, p., and Zaleski, M. H., (1997), Productive Efficiency of the Swine Industry in Hawaii: Stochastic Frontier vs. Data Envelopment Analysis, Journal of Productivity Analysis, Vol. 8, No. 4, Special Issue: Papers Presented at the New England Conference on Efficiency and Productivity (November 1997), pp. 447-459, https://www.jstor.org/stable/41770969.