Productive Efficiency and its Convergence Across Firms: The Case of State Road Transport Undertakings in India
20 Pages Posted: 31 Aug 2000
Date Written: May 2000
The motive of this study is to put forward new information concerning the productive efficiency of the State Road Transport Undertakings (STUs) in India. A well-known multilateral index procedure proposed by Caves, Christensen, and Diewert (1982) is used to compute the growth and relative levels of gross productivity of the STUs during the sample period. Productive efficiency estimates are calculated by separating the effects of variations in the variables beyond managerial control from the gross productivity measures. We also examined the temporal relationship of the cross-sectional rankings of individual STUs' productive efficiency estimates. To address this issue, we calculated Kendall's index of rank concordance along with coefficient of variation of productive efficiency estimates for the sample period. Annual data for a sample of twenty one STUs that operated during the period 1983-84 to 1996-97 are used for the purpose of estimation. We find that there is wide disparity among STUs according to their productive efficiency levels and growth. On an average, small size STUs are more productive than their larger counterparts. Also, by and large, Tamil Nadu STUs seem to be more productive than their counterparts operating in other states of the country. The distribution of ranks of STUs with respect to their productive efficiency levels has remained broadly unchanged over the years.
JEL Classification: L91, L98
Suggested Citation: Suggested Citation