TECHNICAL EFFICIENCY IN THE INDIAN TEXTILES INDUSTRY: A NON-PARAMETRIC ANALYSIS OF FIRM-LEVEL DATA
Article first published online: 8 MAR 2011
© 2011 The Authors. Bulletin of Economic Research © 2011 Blackwell Publishing Ltd and the Board of Trustees of the Bulletin of Economic Research.
Bulletin of Economic Research
Volume 64, Issue 1, pages 109–124, January 2012
How to Cite
Bhandari, A. K. and Ray, S. C. (2012), TECHNICAL EFFICIENCY IN THE INDIAN TEXTILES INDUSTRY: A NON-PARAMETRIC ANALYSIS OF FIRM-LEVEL DATA. Bulletin of Economic Research, 64: 109–124. doi: 10.1111/j.1467-8586.2010.00381.x
- Issue published online: 12 DEC 2011
- Article first published online: 8 MAR 2011
- data envelopment analysis;
- technology closeness ratio
The Indian textiles industry is now at the crossroads with the phasing out of the quota regime that prevailed under the Multi-Fiber Agreement until the end of 2004. In the face of a full integration of the textiles sector in the WTO, maintaining and enhancing productive efficiency is a precondition for competitiveness of the Indian firms in the new liberalized world market. In this paper, we use data obtained from the Annual Survey of Industries for a number of years to measure the levels of technical efficiency in the Indian textiles industry at the firm level. We use both a grand frontier applicable to all firms and a group frontier specific to firms from any individual state, ownership or organization type in order to evaluate their efficiencies. This permits us to separately identify how locational, proprietary and organizational characteristics of a firm affect its performance.