Measuring the performance of small, medium and large manufacturing in Punjab: A bootstrapped Malmquist index analysis

Asim Iqbal, Rana Tahir Naveed, Ahmad Mohmad Albassami & MahsaMoshfegyan

University of Education, Lahore, Pakistan, University Putra Malaysia, Selangor Darul Ehsan MALAYSIA & Salahadin University, Erbil, Iraq

The manufacturing sector has played a pivotal role for the development of the economies. It generates jobs, earn foreign reserves by exports and serves domestic economy as well. Given the importance of manufacturing sector, the performance measurement of this sector has been the main interest of economists, researchers and policymakers. The objective of the present study is to measure the performance of small, medium and large scale manufacturing industries. We utilized non-parametric approach to measure the performance by using survey panel data during 1995-2005. Further, for hypotheses testing, we use bootstrapping approach to test the null of insignificant change in the performance measures. We found that small and large scale manufacturing industries do not significantly change their technological frontier during the study period, while, both are highly efficient due to the better operation and management. Further, for high efficiency, the contribution of scale efficiency is larger as compare to the operation and management in case of large scale manufacturing industries. On the other hand, medium scale industries significantly shifted their technological frontier and adopted new technology or innovations, this sector is also efficient due to the better operation and management. However, the performance of all these manufacturing industries in terms of productivity change is not satisfactory. We conclude that by and large, the manufacturing industry has been endeavoring to improve its efficiency by expanding production with the help of available resources and administrative strategies. The conspicuous element is that the firms are reluctant to put resources into R&D which can shift production frontier upward.
Keywords: Small, Medium and Large manufacturing, Performance, DEA, Bootstrapping, Punjab


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