Technical efficiency and total factor productivity of Indian industries – An inter-state and inter industry comparison between pre and post global financial crisis of 2008-09

Abstract

Technical efficiency, total factor productivity, scale efficiency etc are very important phenomenon for the industrial growth of a nation. Industrial growth means more employment, more export more income and a steady improvement in the overall of the economy. Efficiency in production becomes an inevitable phenomenon for sustainability in the era of globalization. This paper tries to through some light on the measurement of such efficiencies. It considers a state wise comparison taking all industries at a time and side by side individual industries as well for comparison with respect to global financial crisis during the end of 2007 up to 2009. As far as methodology is concerned in this study, we have applied Output orientated DEA, Malmquist DEA methods to panel data to calculate indices of total factor productivity change, which consists of technological change, technical efficiency change and scale efficiency change. This study finds that not all states of India nor individual industries behaved in a similar fashion. Few industries have taken this crisis as a challenge and improved in their technical efficiencies and total factor productivity, but many other industries could not able to accept this challenge.