Efficiency, Technological Progress and Regional Comparative Advantage: A Study of Organised Manufacturing Sector in India

Mukherjee, Dipa and Majumder, Rajarshi (2008): Efficiency, Technological Progress and Regional Comparative Advantage: A Study of Organised Manufacturing Sector in India. Published in: Asia Pacific Development Journal , Vol. 14, No. 2

Abstract

Technological upgradation and increasing capital intensity in organised manufacturing sector in India has been championed on grounds of improving productivity, efficiency, and competitiveness. In a developing economy this is a costly proposition due to capital scarcity, and the effect of technological changes on productivity and efficiency levels have to be estimated before taking such policies. This paper seeks to estimate trends in Factor Productivity, Technological Progress, and Technological Efficiency in this sector and examines their relative importance also. Technical Efficiency is observed to be moderate and further declining in the nineties. Substantial disparity exists among regions and product groups regarding Efficiency, Technical Progress and Efficiency changes. It is found that increasing capital intensity has been associated with falling productivity, efficiency, and technological deceleration in the nineties. Wider diffusion rather than greater capital use is thus recommended for productivity rise. Regional efficiency matrix is also prepared so that states can focus on specific areas where they have comparative advantages.

• Item Type: MPRA Paper
• Language: English
• Keywords: Productivity; Technical Efficiency; Technological Progress; Organised Manufacturing; Diffusion; Regional Comparative Advantage
• Subjects: E - Macroeconomics and Monetary Economics > E2 - Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy > E23 - Production; O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O33 - Technological Change: Choices and Consequences ; Diffusion Processes; D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity; R - Urban, Rural, Regional, Real Estate, and Transportation Economics > R1 - General Regional Economics > R11 - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes; L - Industrial Organization > L6 - Industry Studies: Manufacturing > L60 - General

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