Efficiency and Productivity Change of Food Processing Industry in Assam: An Investigation Using Data Envelopment Analysis Approach
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Author: Hemanta Das, Angom Malemkhombi and N.B. Singh
Author Address: Department of Humanities and Social Sciences, National Institute of Technology, Silchar-788010 (Assam)
Keywords: Annual survey of industries, food processing, Malmquist productivity index, technical efficiency, technological change, total factor productivity.
JEL Codes: L66, O33, O47, R15.
Abstract
The present study aimed to estimate the changes in technical efficiency (TE) and total factor productivity (TFP) in the food processing industry (FPI) and its subsectors of Assam. Secondary data were used for the current study. Data were extracted from the Annual Survey of Industries (ASI) catalogue of EPWRF time series data for the organized food processing industry (3-digit level as per NIC-2008) of Assam from 2008?09 to 2019?20. The Malmquist Productivity Index (MPI) approach of Data Envelopment Analysis (DEA) was used to assess the TE and the TFP changes. The findings revealed that FPI was capital-intensive in Assam. The DEA approach demonstrated that the sector was performing below the best-practice frontier, suggesting scope for improvement. The TFP of the sector had no clear trend of improvement, even though improvement was observed in some years. The change in the TFP of FPIs in Assam was influenced by technological change and TE change. This study made significant contributions to the empirical analysis of the food processing industry. To the best of our knowledge, no such attempt was made to measure TE and TFP change in FPI and its subsectors of Assam. Since the study was solely based on secondary data, it failed to incorporate firm and entrepreneur-specific variables that could impact the technical efficiency and productivity of the firm. Further research focusing on the firm-specific and entrepreneur-specific factors determining efficiency and productivity is needed for the firm.
Description
Indian J Econ Dev, 2024, 20(3), 505-515
https://doi.org/10.35716/IJED-23528