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Sources of Productivity Growth in the Indian Chemical Industry

T Sampathkumar and M Saravanakumar

The IUP Journal of Managerial Economics, 2010, vol. VIII, issue 1 & 2, 112-122

Abstract: The present study estimates the changes in Total Factor Productivity (TFP) of the Indian chemical sector during the period 1980-81 to 2001-02. The Malmquist indices of TFP growth are computed and decomposed into technical change and efficiency change. The obtained estimates of TFP change at the aggregate and sectoral levels indicate that the net impact of economic reforms on the productivity growth of chemical sector was negative. It is evident from the study that the negative TFP change in the chemical sector at the aggregate level aggravated (from 0.4% to 4.1%) in the post-reform period. It is seen that technical change is the factor that leads to deterioration in the overall productivity of the Indian chemical sector. Similar trends are also observed at the sub-sectoral level.

Date: 2010
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Handle: RePEc:icf:icfjme:v:08:y:2010:i:1&2:p:112-122