Productivity growth in India's bakery manufacturing industry

Shiv Kumar, Abdulla and ChhatraPal Singh

Journal of Agribusiness in Developing and Emerging Economies, 2020, vol. 12, issue 1, 94-103

Abstract: Purpose - The main aim of this paper is to examine the total factor productivity (TFP) and its components namely, technological change, technical efficiency change, scale change and allocative change in bakery industry in India. Design/methodology/approach - The study is based on panel data on 35 Indian states for the period 2009–2010 and 2012–2013. Stochastic frontier function is employed to estimate the productivity growth. Findings - The results show thatTFPis driven by technological progress, followed by technical efficiency and scale efficiency. Allocative efficiency, however, has a negative effect onTFP. Research limitations/implications - The bakery industry needs to define its innovation strategies, as these strategies lead to different outcomes that can be achieved only through the management of resources dedicated to the generation and implementation of innovations. Originality/value - Using frontier production function takes the stochastic context into account for the dynamic behaviour ofTFPand its components. Most of the past studies have assessed theTFPat the aggregate level using three-digit National Industrial Classification (NIC) or four-digit NIC code. An analysis at higher levels aggregation masks the variation inTFPand its components available at the firm level. This study uses five-digit NIC data to measure the firm specificTFPof bakery industry. Further, it looks at the contribution of technical progress (TP), technical efficiency, scale efficiency and allocative efficiency.

Keywords: Total factor productivity; Stochastic frontier; Bakery; Industry; India (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eme:jadeep:jadee-12-2019-0204

DOI: 10.1108/JADEE-12-2019-0204

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