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Assessing Technical Efficiency of Sugar Industry in Uttar Pradesh: An Application of Data Envelopment Analysis

Sunil Kumar and Nitin Arora ()
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Sunil Kumar: Guru Nanak Dev University, Amritsar, Punjab, India, Postal: Punjab School of Economics, Guru Nanak Dev University, Amritsar, Punjab, India,

Indian Economic Review, 2011, vol. 46, issue 2, 323-353

Abstract: Using the data of 86 sugar mills operating in the year 2003-04, this study endeavours to gauge the extent of technical efficiency in the sugar industry of Uttar Pradesh (UP) by employing the technique of data envelopment analysis (DEA). The empirical results reveal that mean overall technical inefficiency (OTIE) is about 19 percent, and both managerial and scale inefficiencies contribute almost equal to observed OTIE. Also, a majority of firms need downsizing in the scale of their operations. The regression results indicate that public ownership adversely affects the operating efficiency of firms, and a weak learning-by-doing effect exists in the sugar industry of UP.

Keywords: Sugar Industry; Uttar Pradesh; Data Envelopment Analysis; Ownership; Tobit Regression (search for similar items in EconPapers)
JEL-codes: C61 D61 G32 R32 R58 (search for similar items in EconPapers)
Date: 2011
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