Abstract
In the wake of global competition with greater economic and regional integration, a country's economic growth is largely determined by industrial efficiency. Operating and staying within market under cut throat competition appears as an unprecedented challenge for exporting and non-exporting firms. A data of 403 firms from World Bank Enterprise Survey 2013 is used for estimation of technical and scale efficiencies between and within exporting and non-exporting firms. Data Envelopment Analysis (DEA) is applied for constant returns to scale (CRS) and variable returns to scale (VRS) efficiency scores. It has been found that the average technical efficiency scores for non-exporting firms is slightly greater than the exporting firms. But majority of the firm's technical efficiency remained the same for both type of firms. Industries with highest technical efficiency comprise of chemicals, food, garments and non-metals. Efficiency scores of some firms depict interesting results and found efficient in either of exporting and non-exporting firms. The efficiency analysis can help to identify potential changes which industry may require for its consistent growth in current surge of global competition and nationalization.
Highlights
Export-led growth is considered a prominent paradigm for industrial development and economic growth since decades
Policies to promote economic growth are comprised of investment, monetary and exchange rate, fiscal, financial sector development and structural reforms related policies
Export promotion polices are deeply rooted in the development and growth of small and medium enterprises (SMEs)
Summary
Export-led growth is considered a prominent paradigm for industrial development and economic growth since decades. Since performance is the measure of a firm’s outputs in relation to inputs it uses, this measure of performance is called productivity ratio and it is termed as natural measure of performance.[8] To assess the performance of the exporting and non-exporting firms Data Envelopment Analysis (DEA) has been used for large manufacturing firms of Pakistan. Data Envelopment Analysis (DEA) was first introduced by Charnes, Cooper, and Rhodes in 1978.35 It is a non-parametrical linear approach to measure the relative efficiency of a group of homogenous firms or decision making units (DMUs). Many researchers have worked on efficiency analysis of manufacturing sector of Pakistan by taking different measures like output, capital, labor, growth market share and exports.[39] But studies comprehensively measuring efficiencies of firms considering major inputs responsible for firms’ growth as cost material cost, energy cost non-material costs are still lacking. Food and Garments technical efficiency is almost 60 per cent low than technical efficiency of their exporting counter parts
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