Total factor productivitygrowth in Indian manufacturing: New Evidences using Data Envelopment Analysis

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V Vijayalalitha,J. K. Sharma, Tapan Kumar Nayak, P. Sivakumar

Abstract

The present paper evaluates the performances of manufacturing industries with
respect to total factor productivity. TFP changesand its components are estimated for
68 three-digit manufacturing industries for the period from 2008-09 to 2017-18 using
data from Annual Survey of Industry (ASI) by employingMalmquist Productivity
Index based data envelopment analysis. The study uses gross value added based
single deflation method as output using 2011-12 as a base period. Capital stock and
labour are used as inputs. The paper uses Perpetual Inventory Method to derive the
measure of capital input series. It was found that the year 2015-16 has reported
highest TFP growth mainly due to technological changes. All the study period
exhibits positive trend in TFP growth.In the case of industry-wise analysis, the study
also found that the TFP growth is highest in the manufacturer of magnetic and optical
media followed by manufacturer of jewelry and related articles. It is evident form the
result that the increase in TFP growth is due to technological changes and decrease in
TFP growth is due to technical efficiency change.

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