Andhra Pradesh Manufacturing Industry in the Era of Globalization: A Cobb-Douglas Production Function Analysis

The IUP Journal of Managerial Economics, Vol. X, No. 1, February 2012, pp. 7-17

Posted: 26 Nov 2012  

Pesala Peter

ISEC

Ramesh Vadlamudi

University of Hyderabad

Date Written: September 21, 2012

Abstract

The main objective of the paper is to investigate which factors influenced the output growth — fixed capital or workers? The paper analyzes the data by calculating Compound Annual Growth Rate (CAGR) for different years and different variables like workers, fixed capital and output collected for 62 manufacturing industries from the Annual Survey of Industries (ASI) in Andhra Pradesh. In general, Cobb-Douglas production function has been used in two variables framework and value added has been considered as output and labor and capital as inputs. The Cobb-Douglas production function analysis through panel data analysis was done. The study followed the 1998-99, National Industrial Classification (NIC). The main findings of the study are, firstly, not all industries influenced the output growth. Secondly, most of the industries (20 industries) did not provide employment opportunities. Thirdly, a few (18) manufacturing industries’ fixed capital CAGR has negatively declined. Fourthly, a few (12) manufacturing industries’ output CAGR has negatively declined. And, finally only manufacture of machinery and equipment industry’s workers per factory employed average declined, and rest of the industries’ average number of workers per factory employed increased.

Suggested Citation

Peter, Pesala and Vadlamudi, Ramesh, Andhra Pradesh Manufacturing Industry in the Era of Globalization: A Cobb-Douglas Production Function Analysis (September 21, 2012). The IUP Journal of Managerial Economics, Vol. X, No. 1, February 2012, pp. 7-17. Available at SSRN: https://ssrn.com/abstract=2149984

Pesala Peter (Contact Author)

ISEC ( email )

Nagarabavi Post
Bangalore
Bangalore, 560 072
India
7259852032 (Phone)

Ramesh Vadlamudi

University of Hyderabad ( email )

Central University (PO)
Andhra Pradesh
Hyderabad, CA Andhra Pradesh 500 046
India

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