Perspectives on the Sources of Heterogeneity in Indian Industry

[摘要] The authors examine technical efficiencyvariation across four industrial sectors in India, using astochastic production frontier technique. The results arecomparable to technical efficiency distribution patternsobtained in other countries. The authors examineheterogeneity in firm-level efficiency against internal,firm-level characteristics and against externalcharacteristics (industry and location). The results suggestthat managerial effectiveness significantly influencesefficiency and that considerable benefits derive fromlocation within established industrial clusters forparticular industries. The methodology and findings indicatethat the study of industry-specific technical efficiencypatterns is a useful analytical tool for tracking domesticfirms' response to liberalization and the advance ofmarket forces. An important policy implication of theauthors' results: There is considerable room forefficiency gains through better organization and managementof production processes and improved supply chainmanagement, even in the highly organized corporate sector.These gains could be achieved by purely internal learningprocesses with no extra investment in physical plant orequipment, or with the help of outside consultants, orthrough business alliances with partners from industrialcountries (a rising trend). The results also show thatgreater technical efficiency correlates with better energyuse and higher investments in plant management. How firmscan be induced to undertake such investments in the"software" of production is an important issue.Liberalization and globalization are likely to bringsignificant productivity gains even in low-technologyindustries as managers gear up to meet the challenges of competition.

[发布机构] World Bank, Washington, DC

[学科分类] 社会科学、人文和艺术（综合）

[关键词] ACCOUNTING;ACCOUNTING PRINCIPLES;ALLOCATIVE EFFICIENCY;CDF;CITY SIZE