Changing Efficiency Profile of Organized and Unorganized Segments of Indian Garment Producing Units: A Comparative Analysis in the Post-MFA Period 1 (original) (raw)
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abstract The unorganized Textile and Garments (T&G) units in India have been facing increasingly intense competition following the withdrawal of major protective measures favouring the decentralized production units in 2000 Textile Policy along with encouragement of large-small linkages through subcontracting agreements at both pre-and post-production stages. A cluster analysis conducted for the average labour and capital productivities of different groups indicated the relative dominance of structural factors such as size-rather than the product-group-based classification of firms – in explaining the inter-group variation in productivity. A modified Heckman selection model was applied to analyze the determinants of marketing agreement and the differential impact of different firm characteristics on enterprises with and without marketing agreement. The results demonstrated that instead of relying solely on market-driven forces of productivity-enhancement, it is better to pay heed to the structural location of the enterprises indicated by the availability of institutional support, presence of female-headed enterprise and so on.
2017
Recent withdrawal of important protective measures and the announcement of the Textile Policy 2000 have marked a shift away from government support and policyguided improvement in the performance of the unorganized Indian Textile and Garment enterprises. The new policy regime has laid greater emphasis on marketdriven linkages between large and small firms in enhancing the latter's performance through various preand post-production supports from the large unit. In this context the paper seeks to assess the new policy orientation critically by examining its effectiveness in supporting the intrinsically heterogeneous unorganized section. Motivated by the findings from a previous work which highlighted that different segments of these enterprises that represent diverse organizational types and operate under varied demand conditions face different structural constraints in accessing such market-driven linkages as subcontracting, the paper attempted to assess the precise impact of par...
A Non-Radial Measure of Efficiency in Indian Textile Industry: An Analysis of Unit-Level Data
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Efficiency of Indian manufacturing firms: textile industry as a case study
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Translog stochastic frontier production functions are fit to firm-level cross-sectional data on India's textile firms for each of five selected years to estimate technical efficiency (TE) of firms. We find that average TE varies between 68 to 84% across these years and that ...
Technical Efficiency in the Indian Textiles Industry: A Non-Parametric Analysis of Firm-Level Data
Bulletin of Economic Research, 2012
Technical Efficiency (TE) of Indian textile firms is obtained using non-parametric Data Envelopment Analysis (DEA). TE scores are then analyzed to get the answers to the following questions: • What are the levels of TE of individual firms when measured against a benchmark constructed from the entire data set i.e., against the global frontier for India as a whole? • Can we infer anything about the size-regional efficiency relationship of firms in the textile industry in India? • Can we say anything about the trend of technology gap i.e., the difference between the regional frontier and the global frontier? • Is there any systematic difference in the regional efficiency of the firms for different location/ownership/organization for the years taken into consideration? • Can we draw any conclusion about the work culture of the states taken into account from the conditional regional efficiency for the different states taken into account? The results obtained can be summarized through the following points: • regional efficiency of Tamil Nadu is the best amongst the six major states considered; • the smallest average size class of firms has the highest group efficiency; • that wholly privately owned (WPO) category of firms has both the largest average size and also has the highest group efficiency amongst ownership categories. Hence, evidence of size-regional efficiency relationship is ambiguous; • we find a clear trend of rising regional efficiency over time. Hence, technology gap across regions seems to be diminishing over time.
RePEc: Research Papers in Economics, 2011
Textile manufacturing in eight developing countries: how far does the business environment explain firms' productive inefficiency? Production frontiers and technical inefficiency determinants are estimated by using stochastic frontier models. Textile manufacturing is considered for a sample of eight developing countries encompassing about one thousand firms. We find that the most influential individual inefficiency determinants relate to in-house organization. Both access to financing and infrastructural services (e.g. power supply, modern information technologies…) also matter. Information about determinants is then regrouped into three broad categories of factors (e.g. managerial organization, economic environment, institutions). Results do not reject the hypothesis that managerial know-how and the quality of institutions are the most important determinants. The impact of the external economic environment is of less importance although statistically significant. Sector-based simulations are then proposed in order to assess productivity gains which would occur if firms had the opportunity to evolve in most favorable environments within the sample. Domestic and international production contexts are considered, respectively. When referring to domestic benchmarks, the contribution of in-house organization prevails as the main source of gains for the eight countries. The role of institutions proves dominant for Egypt and India when focusing on international simulations.
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In this article, we look at recent developments in the Bangladesh garment industry on the issue of efficiency and productivity. First, we were looking for new ideas. How are companies trying to improve their efficiency? Then, we were trying to see if there was a relationship between a companies‟ (x) efficiency and cost saving (a) and increased revenue (y). Of course, intuitively, we would all hypothesize that there must be some relationship between efficiency and reduction of cost of manufacturing and ultimately increased revenue. Further, we would all probably hypothesize that the slope of the function describing that relationship must be significantly higher than zero. Nevertheless, we tried to document the connection so that companies can believe it and give it more attention. Theoretical relationships are one of the weakest ways to try to persuade CEOs of the existence of anything. Show them the numbers, only then they will agree. This paper is an attempt to persuade a readymade garments manufacturing unit to increase efficiency to cut cost and increase revenue, we show that there is a direct causal relation to efficiency and revenue earnings.