Open AccessProductive Performance of Indian Mining Industry: A Stochastic Frontier Decomposition
Author(s) -
Auro Kumar Sahoo,
Dukhabandhu Sahoo,
Naresh Chandra Sahu
Publication year - 2017
Publication title -
global journal of business, economics and management
Language(s) - English
Resource type - Journals
ISSN - 2301-2579
DOI - 10.18844/gjbem.v7i1.1469
Subject(s) - total factor productivity , productivity , frontier , investment (military) , stochastic frontier analysis , production–possibility frontier , technical change , panel data , economics , technical progress , technological change , econometrics , agricultural economics , production (economics) , economic growth , geography , macroeconomics , archaeology , politics , political science , law
This paper has estimated the Total Factor Productivity (TFP) growth of Indian mining Industry for the period 1989-2014 based on a decomposed formulation of stochastic production frontier. Productivity growth and its decomposed components have been compared over the study period. It is found that the annual average TFP growth of mining industry rose up from 3.66 % during 1989-2005 to 8.76 % during 2006-2014. Further, the result of decomposition reflects that the major source of productivity growth has changed from Technological Progress (TP) in initial years to Technical Efficiency Change (TEC) in recent years. In view of this, it could be suggested that mining industry in India requires to focus on investment in innovation and up-gradation of existing technology to further enhance productivity. Keywords: Total Factor productivity; Mining Industry; Panel data; Stochastic Frontier Analysis (SFA)