Organizational Form and Efficiency: Evidence from Indian Sugar Manufacturing
U.S. International Trade Commission
Gary D. Ferrier
University of Arkansas - Sam M. Walton College of Business
Carl B. Linvill
Government of the State of Nevada - Nevada State Office of Energy
J. OF COMPARATIVE ECONOMICS, Vol. 21 No. 1, August 1995
Frontier cost and production functions are used to examine the effects of ownership on intrafirm differences in technical, cost, and allocative efficiency in the Indian sugar processing industry. Cooperatives are found to be as or more efficient than their counterparts. The results suggest that technical and coordination economies of vertical integration provide important advantages for the cooperative form of organization. We also find that seasonal labor is overutilized and permanent labor is underutilized relative to their cost-minimizing proportions. This is possibly a second-best solution in light of employment regulations.
JEL Classification: J43, L66Accepted Paper Series
Date posted: July 7, 1998
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