Annual Survey Of Industries Research Articles

Export activity, R&D investment, and foreign ownership: does it matter for productivity?

PurposeThe paper examines the impact of export activity on productivity and how this effect is moderated by R&D investment and foreign ownership.Design/methodology/approachA time-lag effect is taken into account when examining the proposed model. Data are collected from the Annual Industrial Survey of the National Bureau of Statistics of China. A dataset containing 117,340 firms across the sample period (2001–2007) are used to test the hypotheses.FindingsThe results indicate that while R&D investment plays a significant role in strengthening the positive effect of export activity on a firm's productivity, foreign ownership surprisingly has a negative moderating role.Originality/valueScholarly interest in the links between export activity and productivity is on the rise. However, the bulk of research has been focused on understanding the effects of export activity on productivity at the country or industry level. Little has been done at the firm level. Another gap in the literature is that the mechanism through which the impact of export activity can be leveraged to enhance the firm's productivity has been largely ignored. To address these issues, the study adopts the learning-by-exporting theory to examine the relationship between export and productivity at the firm-level and how R&D investment and foreign ownership may explain how learning can be leveraged to enhance the firm's productivity. Finally, these relationships are examined in the context of firms from an emerging market, China, which is especially relevant for the learning-by-exporting argument used in this study.

Automotive Components Industry and Profitability Factors: Evidence from India

Based upon the dataset drawn from Centre for Monitoring of Indian Economy (CMIE) Prowess database, World Bank and Annual Survey of Industries (ASI) for a period 2000–2015, this article tests the persistence of profitability and checks the validity of Resource-Based View (RBV) in elucidating the variations in profitability on an industry-specific setting that is, Indian automotive components industry under a Generalized Method of Moments (GMM) framework. The article finds that the persistence of profits is positive and moderate, indicating that the industry is reasonably competitive. The results further suggest that the past R&D intensity, export intensity, size, labour productivity growth, and GDP growth have a positive bearing on the current profitability, while current R&D intensity, A&M intensity, capital intensity, firm leverage and output of OEMs were found to have exercised negative effect. Since past R&D intensity is found to be positively influencing the current profitability, this article infers that RBV holds for this industry.

The Case of the ‘Missing Middle’ in the Indian Manufacturing Sector: A Firm Level Analysis

This study revisits the ‘missing middle’ phenomenon of the Indian manufacturing sector. Though ‘missing middle’ has been described and analyzed by many studies, a key gap in the literature that we note is that the phenomenon of ‘missing middle’ has been taken as an accepted artifact of the Indian manufacturing sector. We look into the size-structure relation based on the argument that ‘class interval based’ and ‘aggregate level’ analyses of the industrial sector may be misleading. We use the firm level data available for Annual Survey of Industries (ASI) to check for the ‘missing middle’. We look for the trend both at the aggregate and disaggregate levels. We are unable to find a ‘missing middle’, either at the aggregate or disaggregate level, once we drop the classification of data based on apriori class intervals. We find that most firms in India are small firms and there is no evidence of a clustering of firms at higher size categories.

The Indian Bidi Industry: Trends in Employment and Wage Differentials.

Background: The bidi industry in India is predominantly an unorganized sector. It continues to enjoy tax benefits, arguably, to protect bidi workers' interests and employment. Our objective was to study trends in employment and wage differentials in the bidi industry using nationally representative data.Methods: We studied trends in employment and wages in the bidi industry using secondary data from the National Sample Survey Office (NSSO) and the Central Statistics Office (CSO), Government of India–the Annual Survey of Industries (ASI) (2000–2001 to 2011–2012) and Enterprises Survey (2000–2001, 2005–2006, 2010–2011).Results: The bidi industry contributed to only 0.65% of the total gross value added (GVA) by the entire manufacturing industry. Employment in this industry was primarily through contractors. Bidi workers earned only 17% of wages compared to workers in other manufacturing industries. Although females constituted the majority of bidi workers, they earned INR 7,000 to 8,000 (USD 155.7 to 178) less than male bidi workers annually. Despite the increase in bidi industry profits from INR 1.7 billion (USD 37.8 million) in 2005–2006 to INR 12.8 billion (USD 285 million) in 2010–2011, the wages of bidi workers have continued to decline over this period.Conclusion: Bidi workers earn much less compared to workers in other manufacturing industries and are subject to income inequality. There is a need to increase registration of the bidi industry for better administration of taxes and prevention of exploitation of the bidi workers. Skill building and alternative employment could provide better job quality, wages, social security and employment benefits.

An Analysis of MSME’s Efficiency: A Study of Two Comparable Northern Indian Regions

Jammu and Kashmir (J&K) and Himachal Pradesh (HP) are the two northern states of the Indian union. The two neighbouring states are mountainous and backward as compared to the rest of the country. Of the two, J&K has more natural resources and population. On the contrary, HP, over time, has demonstrated higher outcomes in terms of basic indicators, gross state domestic product (GSDP) and economic growth. This article examines these two economies and attempts to compare them on the basis of their respective efficiencies in industrial production. Although data on GSDP show that HP has grown over time and has surpassed that of J&K in 2017–2018, technical efficiencies of the two regions, as drawn from Annual Survey of Industries (2017), are low and converging. Stochastic frontier results demonstrate that industrialisation in both regions is labour-intensive. Tobit regression results point to low contribution of inputs towards technical efficiency. Also, minimal use of communication and technology, low profits and weak policies contribute negatively in the direction of the technical efficiency of the firms in the two regions. The results specifically imply that in the region of J&K, government support and interventions are needed to address both endogenous and exogenous factors contributing to firms’ inefficiencies.

Unrestricted geometric distance functions and the Geometric Young productivity index: an analysis of Indian manufacturing

In this paper, we employ the less frequently used Geometric Young index to measure productivity change. We reformulate the Geometric Distance Function of Portela and Thanassoulis (J Product Anal 25:25–41, 2006) by removing the restrictions on the individual input scaling factors and the output scaling factors to obtain the benchmark input–output bundle on the frontier. In this reformulated model, the Geometric Young index is exhaustively decomposed into the technical efficiency change and technical change factors even under variable returns to scale. Further, between any two periods, the measured rate of technical change is identical across all units. In our empirical analysis, we use state-level data from the Annual Survey of Industries for the period 2010–2011 through 2016–2017 to measure total factor productivity growth in Indian manufacturing and provide its decomposition for the major manufacturing states in India. At the All-India level, the annual average Geometric Young productivity index shows a modest growth over the sample period. This resulted from an improvement in technical efficiency reinforced by a very modest increase in the Technical Change Index.

Foreign direct investment and industrial agglomeration: Evidence from India

This study analyses the spatial and sectoral distribution of Greenfield Foreign Direct Investment (GFDI) and its impact on industrial agglomeration in India for the time period 2006–2015. We employ a unique dataset obtained by merging GFDI data from FDI Markets and plant level data from Annual Survey of Industries (ASI). We find that the Indian manufacturing sector shows signs of industrial dispersion rather than agglomeration throughout the sample period. Likewise, the spatial distribution pattern of GFDI also shows a decline in regional concentration and, interestingly, GFDI also seems to target new destinations. We also find that the increased spatial spread of GFDI leads to an industrial dispersion in Indian manufacturing industries.

Measuring the intensity of innovation in the Brazilian food sector: a DEA-Malmquist approach

Purpose This study aims to measure the intensity of innovation in the Brazilian food sector and compares it to other manufacturing sectors in the country. Design/methodology/approach The authors used economic and financial data provided by the annual survey of industry [Pesquisa Industrial Anual (PIAs), in Portuguese] and other supporting data provided by the survey of innovation [Pesquisa de Inovação (PINTEC), in Portuguese] and the classification of technology intensity (TI) proposed by the Organization for Economic Co-operation and Development. The authors subsequently applied the Malmquist index in addition to the data envelopment analysis to measure innovation. Findings The results reveal that the Brazilian food sector is classified as a sector with low TI and investment in research and development (R&D), which represents one of the lowest rates when compared to other sectors. Thus, the Brazilian food sector is far from achieving its full potential. Nevertheless, the authors noticed that the sugar refinery industry showed an evolution in its technology frontier and presented a frequency of innovation similar to the average of high-tech industries. Originality/value This study contributes to the debate on innovation in the food sector, emphasizing the need to accomplish higher investments in R&D to increase the productivity of the sector.

Agglomeration and Productivity: Evidence from Indian Manufactuaring

This study analyses the impact of industrial agglomeration on the total factor productivity (TFP) of Indian manufacturing. We employ plant-level data from the Annual Survey of Industries (ASI) to measure TFP and industrial agglomeration. Our econometric analysis discerns a positive impact of industrial agglomeration on plant productivity. In addition, we find that the larger plants are the beneficiaries of productivity gains associated with agglomeration. Further, our findings are robust to alternate measures of TFP.

Wage-differentials and Their Determinants Across Industries in the Organized Manufacturing Sector of India

This article calculates the magnitude of wage differentials across industries in the organized manufacturing sector of India and identifies the major determinants of wage differentiation among the industries. Using data from Annual Survey of Industries in India for the period from 2000–2001 to 2015–2016, this study shows that mean wage is less in labour-intensive industries compared to the capital-intensive industries. The results of panel regression of annual average wage on various industry-specific factors show that productivity of labour is the most important factor in wage determination, and productivity largely depends on capital–labour ratio. The other significant factors in this regard are farm size, amount of profit and proportion of casual and female workers in total employment. Important policy implication of this study is that regulatory wage fixation and wage bargaining outcomes are not as significant as productivity differentials in explaining wage gaps across industries.

Regional Disparities in Employment Intensity of Indian Industries: A State-level Analysis

The pace of industrialization plays a crucial role in the economic growth of any country. It provides high employment opportunities to the labor force, diminishes the cost of production, upsurges the saving, and raises the demand for goods and services in the economy. Furthermore, it helps in relocating surplus labor from the agriculture sector. This study is an attempt to find the states in India wherein the industrial sector generates more jobs. It further unearths the decomposition of industrial output and the regional concentration and dominance of industrial activities in India. To accomplish the objectives, the study utilizes the secondary data collected from the Annual Survey of Industry. The period of the study is from 1980–1981 to 2013–2014, and it encompasses 18 major states in India. The findings of the study suggest that a weak relationship exists between employment and output of the industrial sector for the majority of the states during the study period. The decomposition results show that there exists a large degree of regional disparity in industrial growth across the states, which is mostly driven by labor productivity and not by an increase in the supply of labour. Therefore, in order to boost the industrial sector, the states lagging in industrial development should give more emphasis on state-specific industrial policy to attract more investment and create more infrastructure.

FOREIGN PRESENCE AND INDONESIAN FOOD INDUSTRY PERFORMANCE

This paper analyzes the influence of foreign presence on the performance of food industry in Indonesia using panel data from 28 subsectors in the period of 2011-2015. The data used is the Annual Survey of Large and Medium Industries (IBS) from Statistics Indonesia. The performance indicator utilized is the price cost margin (PCM). The PCM model was estimated using regression and tested with the Hausman statistical test. The results show that foreign presence increases the performance of Indonesia's food industry. Other factors that affect the industry's performance are industry concentration, market growth and imports of raw materials. Foreign presence, concentration and market growth have a positive effect on performance, meanwhile import ratio has a negative effect. The government needs to continue to encourage foreign investment in the food industry since the presence of foreign presence will improve industrial performance. In addition, efforts are also needed to supply quality raw materials by encouraging the development of domestic upstream industries.

Selection of Input Variables in DEA using 2 - Level Fractional Factorial Design

Data Envelopment Analysis (DEA) can be a statistics oriented, non – parametric method to gauge relative efficiency supported pre – selected Inputs and Outputs. It is a implemented mathematics based technique for measuring the relative overall performance of organisational units in which the presence of Multiple Inputs and Outputs makes evaluation difficult. In a few cases, the performance model isn't well defined, so it's important to pick the proper Inputs and Outputs by way of other means. We used, Morita and Avkiran proposed technique after it has been developed an Input – Output Selection Method that uses Fractional Factorial design, which is an Statistical method to locate a best and optimal combination. In this study 2k – p Fractional Factorial design is applied to demonstrate the proposed method relates to the Manufacture of Pharmaceuticals, Medicinal Chemical and Botonical Products from the Manual of Annual Survey of Industries (ASI) 2016 – 2017.

Asymmetric Business Cycles in Segmented Labour Markets

We document the presence of asymmetric business cycles in both regular and contract labour markets in India and investigate the role of nominal wage rigidities and labour adjustment costs in accounting for these asymmetries. Using data from Annual Survey of Industries, we find that (i) the growth rate of output is negatively skewed, (ii) the growth of regular employment is negatively skewed while that of contract employment is positively skewed, (iii) the nominal wage growth of regular workers is positively skewed while that of contract workers is negatively skewed. We show that a standard business cycle model augmented with asymmetric wage adjustment cost for both regular and contract labour coupled with symmetric labour adjustment cost for regular workers does a good job of explaining the asymmetries in both output and employment cycles. We also find that the presence of contract labour relaxes the constraint of downward nominal wage rigidity, and hence decreases the optimal level of grease inflation required in the economy.

Did Economic Reforms Affect Manufacturing Productivity in India?

India has witnessed a series of policy reforms since 1991, which aimed to increase productivity of the manufacturing sector. Did these reforms increase productivity in manufacturing plants? We address this question using rich data from the Annual Survey of Industries in India spanning three decades from 1983-84 to 2012-13. We focus on three reforms: delicensing, allowing foreign direct investments, and tariff reduction. We find no systematic or significant impact of the reforms on plant-level productivity in manufacturing. This result holds whether we look at the reforms individually using a difference-in-difference technique or simultaneously using fixed effects. Productivity is correlated with plant size, industry concentration, and misallocation, but we find that the reforms had no significant effect on any of these channels. This sheds light on why the economic reforms in India may have failed to impact productivity.

What Really Affects Plant-level Productivity?

This article investigates the plant-level characteristics that can affect plant-level productivity. Using Annual Survey of Industries (ASI) data from 1998–1999 to 2012–2013, we find that plant-level productivity is positively correlated with the number of products produced in the plant. It implies that the multi-product plants are relatively more productive than plants that produce only one product. We also find that plants are more productive if they enter the export market, and plant-level productivity is negatively associated with the ratio of production to non-production workers. This finding supports the fact that the plants with more skilled labour compared to unskilled labour are comparatively more productive. Additionally, we find that information and communication technology (ICT) has a significant and positive association with a plant’s productivity level.

Does Win-Win Opportunity Always Result in Pollution Abatement? An Application of Directional Distance Function to Indian Cement Industry

Environmental regulation has traditionally been considered to have as detrimental impact on firm performance as it compels the complying firms diverting their resources from productive purpose to pollution abatement. Contrary to this, Porter hypothesis says that a well-designed environmental regulation, if implemented properly, may result in lower level of pollution with enhanced firm performance - a proposition called 'win-win opportunity'. The objective of the paper is two-fold. Firstly, to examine whether there exists any 'win-win opportunity' for Indian cement firms complying with environmental regulations. Secondly, to verify whether such 'win-win opportunity', if exists, can actually lead to pollution abatement. We assume Indian cement firms produce two outputs, cement as desirable output and pollution (CO2 emission) as bad output and measure firm performance by environmental efficiency defined as ability of the firms to simultaneously increase the desirable output and reduce the bad output by same proportion. We adopt directional distance function approach to compute efficiency of the firms under regulated and non-regulated scenarios and compare the efficiency scores using Wilcoxon Rank Sum Test. We have used firm level input-output data of Indian cement industry from Annual Survey of Industries (ASI) for the year 1999-00 through 2004-05.Our estimates shows, under regulated scenario, mean (in) efficiency scores of the Indian cement firms for the year 1999-00 through 2004-05 are 0.3946, 0.2038, 0.2989, 0.2778, 0.3276 respectively. These efficiency scores imply that in the year 1999-00, Indian cement firms could simultaneously expand good output cement and reduce bad output carbon dioxide to an extent of nearly 40% without using inputs any more, if they strictly comply with the stipulated environmental standards meant for them. Therefore, a potential win-win opportunity does exist in the industry. However, Wilcoxon Rank Sum Test confirms that (in) efficiency scores are much higher under non-regulated scenario, implying higher feasible expansion of good output. Therefore, such win-win opportunity may not necessarily induce the Indian cement firms to spontaneously comply with the environmental regulation since regulation imposes a significant cost on them in terms of lower feasible expansion of the desirable output. Possibility of higher feasible expansion of the good output under non-regulated scenario may not motivate the firms for pollution abatement. We propose that the strategy of information disclosure might be of immense help for the regulatory authority to incentivize the firms in favor of pollution abatement. Since there is always very high monitoring and enforcement cost associated with environmental regulation, the strategy we proposed on the basis of our findings may be used while formulating environmental policy for the polluting industries, in general and Indian cement industry, in particular.

Job Reallocation Dynamics in India: Evidence from Large Manufacturing Plants

AbstractThe paper contributes to the limited literature on job reallocation dynamics in Indian manufacturing. The study uses annual data from the Annual Survey of Industries (ASI) for the years 2000–01 to 2015–16. The study finds job reallocation in India to be quite high compared to flexible labour markets such as the United States and Canada. Gross job reallocation shows a rising trend over time, which is driven partially by the increasing share of contract workers in the workforce. There is heterogeneity in the job reallocation dynamics across job types. This is evident in the relative importance of the different job types as plants adjust to permanent and temporary changes in demand. Labour regulations also play an important role in such a process. Finally, in contrast to the evidence for the United States and the United Kingdom, our study found firm evidence to reject the hypothesis that job reallocation is countercyclical in India.

Employment Change in Manufacturing Industries in the Western Province of Sri Lanka: A Shift and Share Analysis

Within the last two decades manufacturing sector has been important to the economy of Sri Lanka in different manner. Particularly in terms of the employment generation and the location of manufacturing units Western Province leads other provinces of the country Accessibility as well as the availability of infrastructure facilities has played a vital role in attracting industries to the Western Province. However; datafor the 1990 decade indicate that manufacturing employment of the Western Province has beenfluctuating by loosing its relative significance. Therefore, it is important to analyze how the employment change in this province has taken place during past few years, as it is the core region of the country Such an analysis is useful to understand the future locational pattern of manufacturing industries in the province. Shift and share analysis is the technique used to analyse this employment change, as this paper attempts to evaluate the structural and regional influences for the employment change in the province. The analysis is based on the Annual Survey of Industries. It delimits the employment change in medium and large-scale manufacturing, as these surveys have only taken into consideration medium and large-scale enterprises for the enumeration. This analysis consists of typo main parts. First part is the shift analysis and the second part is shift and share analysis. Findings of the shift analysis indicate that the rate of employment decline of the Western Province is faster than the national rate of decline. Shift and share analysis emphasises that manufacturing establishments, which are not nationally well-distributed have a location preference to the Western Province. It is evident that industrial decentralization programme has particularly been responsible for this locational change in employment.

Productivity Change in Indian Manufacturing: A Comparison of Pre Reform and Post Reform Period

The economic reforms were initiated in 1991 as part of the structural adjustment programme in India. It constituted of the three-pronged approach of Liberalization, Privatization and Globalization to boost investment, production and productivity in the economy. This paper attempts to analyse the trend of, technical efficiency, technological change and TFP growth in the Indian manufacturing sector during 1981-82 to 2011-12. The period up to 1990-91 is considered as pre-reform while the subsequent period is regarded as post-reform. The data used in this study for calculating productivity and its various components have been sourced from the Annual Survey of Industries (ASI) for the relevant years. The manufacturing sector is modelled as an industry producing a scalar output measured by the gross value added at constant prices by employing two-factor inputs namely labour and capital. Data Envelopment Analysis based Malmquist Index has been calculated to arrive at the estimates of technical efficiency, technological change and total factor productivity growth and a comparison has been made between pre-reform and post-reform period.