Productive Performance of Indian Mining Industry: A Stochastic Frontier Decomposition
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Apr 12, 2017
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Abstract
This paper has estimated the Total Factor Productivity (TFP) growth of Indian mining Industry for the period 1989-2014 based on a decomposed formulation of stochastic production frontier. Productivity growth and its decomposed components have been compared over the study period. It is found that the annual average TFP growth of mining industry rose up from 3.66 % during 1989-2005 to 8.76 % during 2006-2014. Further, the result of decomposition reflects that the major source of productivity growth has changed from Technological Progress (TP) in initial years to Technical Efficiency Change (TEC) in recent years. In view of this, it could be suggested that mining industry in India requires to focus on investment in innovation and up-gradation of existing technology to further enhance productivity.
Keywords: Total Factor productivity; Mining Industry; Panel data; Stochastic Frontier Analysis (SFA)
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References
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Asafu-Adjaye, J. & Mahadevan, R. (2003). How cost efficient are Australia’s mining industries?, Energy Economics, 25, 315-329.
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Bradley, C & Sharpe, A. (2009) A detailed analysis of the productive performance of mining in Canada, Center for the study of living standards, prepared for the micro-economic policy analysis branch of industry, Canada, September.
Darmstadter, J. (1999). Innovation and productivity in U.S. coal mining. in R. David Simpson ed., Productivity in natural resource industries: Improvement through innovation
Garcia, P., Knights, P. F., & Tilton, J. E. (2001). Labour productivity and comparative advantage in mining: the copper industry in Chile, Resources Policy, 27, 97-105.
Greene, W. H. (1997). Frontier Production Function in M. Hashem Pesaran & Peter Schmidt (Ed.), Handbook of applied econometrics, Volume II: Microeconomics, 81-166, Blackwell publishers.
IBM (2011-12) Indian mineral industry at a glance 2011-12, Indian bureau of mines Nagpur
Indian minerals yearbook (IMY) 2013. Indian bureau of mines, Government of India.
Jara, J. J., Perez, P. & Villalobos, P. (2010). Good deposits are not enough: mining labour productivity analysis in the copper industry in Chile and Peru 1992-2009, Resources Policy, 35, 247-256.
Kulshreshtha, M. & Parikh, J. K. (2002). Study of efficiency and productivity growth in opencast and underground coal mining in India: a DEA analysis, energy Economics, 24, 439-453.
Kumbhakar, S.C. & Lovell, C.A.K., (2000). Stochastic Frontier Analysis. New York: Cambridge University Press, 279- 309.
Meeusen, W. & van den Broeck, J., (1977). Efficiency Estimation from Cobb-Douglas Production Function With Composed Error. International Economic Review, 18, 435-444.
Naples, M. I., (1998). Technical and social determinants of productivity growth in Bituminous coal mining, 1955-1980, Easter Economic Journal, 24, 325-342
RBI (2011). Reserve Bank of India, Handbook of Statistics on the Indian Economy.
RBI (2016). Reserve Bank of India, Handbook of Statistics on the Indian Economy.
Sahoo, A. K., Sahoo, D. & Sahu, N. C. (2014). Mining export, industrial production and economic growth: A cointegration and causality analysis for India, Resources Policy, 42, 27-34.
Samantaraya, A., Sahoo, A. K., Mallick, A. & Bhuyna, B (2014). Has Odisha become less poor in last decade?, Economic and Political Weekly, 49, 62-67.
Syad, A., Grafton, Q. & Kalirajan, K. (2013). Productivity in the Australian mining sector, BREE Discussion paper series, March.
Tilton, J. E & Landsberg, H. H. (1997). Innovation, productivity growth and the survival of the U. S. Copper industry, Discussion paper 97-41, Resources for the future.
Tilton, J. E. (2001). Labour productivity, costs and mine survival during a recession, Resources policy, 27, 107-117.
Topp, V., Soames, L., Parham, D. & Bloch, H. (2008). Productivity in the mining industry: Measurement and Interpretation, Productivity Commission Staff Working Paper, December.
Asafu-Adjaye, J. & Mahadevan, R. (2003). How cost efficient are Australia’s mining industries?, Energy Economics, 25, 315-329.
Aydin, H. & Tilton, J. E. (2000). Mineral endowment, labour productivity and comparative advantage in mining, Resources and Energy Economics, 22, 281-293.
Battese, G.E. & Coelli, T. J. (1992). Frontier production functions, technical efficiency and panel data: with application to paddy farmers in India. Journal of Productivity Analysis 3, 153 -169.
Berndt, E. R., (1990). Energy use, technical progress and productivity growth: A survey of economic issues. Journal of Productivity Analysis, 2, 67-83.
Bradley, C & Sharpe, A. (2009) A detailed analysis of the productive performance of mining in Canada, Center for the study of living standards, prepared for the micro-economic policy analysis branch of industry, Canada, September.
Darmstadter, J. (1999). Innovation and productivity in U.S. coal mining. in R. David Simpson ed., Productivity in natural resource industries: Improvement through innovation
Garcia, P., Knights, P. F., & Tilton, J. E. (2001). Labour productivity and comparative advantage in mining: the copper industry in Chile, Resources Policy, 27, 97-105.
Greene, W. H. (1997). Frontier Production Function in M. Hashem Pesaran & Peter Schmidt (Ed.), Handbook of applied econometrics, Volume II: Microeconomics, 81-166, Blackwell publishers.
IBM (2011-12) Indian mineral industry at a glance 2011-12, Indian bureau of mines Nagpur
Indian minerals yearbook (IMY) 2013. Indian bureau of mines, Government of India.
Jara, J. J., Perez, P. & Villalobos, P. (2010). Good deposits are not enough: mining labour productivity analysis in the copper industry in Chile and Peru 1992-2009, Resources Policy, 35, 247-256.
Kulshreshtha, M. & Parikh, J. K. (2002). Study of efficiency and productivity growth in opencast and underground coal mining in India: a DEA analysis, energy Economics, 24, 439-453.
Kumbhakar, S.C. & Lovell, C.A.K., (2000). Stochastic Frontier Analysis. New York: Cambridge University Press, 279- 309.
Meeusen, W. & van den Broeck, J., (1977). Efficiency Estimation from Cobb-Douglas Production Function With Composed Error. International Economic Review, 18, 435-444.
Naples, M. I., (1998). Technical and social determinants of productivity growth in Bituminous coal mining, 1955-1980, Easter Economic Journal, 24, 325-342
RBI (2011). Reserve Bank of India, Handbook of Statistics on the Indian Economy.
RBI (2016). Reserve Bank of India, Handbook of Statistics on the Indian Economy.
Sahoo, A. K., Sahoo, D. & Sahu, N. C. (2014). Mining export, industrial production and economic growth: A cointegration and causality analysis for India, Resources Policy, 42, 27-34.
Samantaraya, A., Sahoo, A. K., Mallick, A. & Bhuyna, B (2014). Has Odisha become less poor in last decade?, Economic and Political Weekly, 49, 62-67.
Syad, A., Grafton, Q. & Kalirajan, K. (2013). Productivity in the Australian mining sector, BREE Discussion paper series, March.
Tilton, J. E & Landsberg, H. H. (1997). Innovation, productivity growth and the survival of the U. S. Copper industry, Discussion paper 97-41, Resources for the future.
Tilton, J. E. (2001). Labour productivity, costs and mine survival during a recession, Resources policy, 27, 107-117.
Topp, V., Soames, L., Parham, D. & Bloch, H. (2008). Productivity in the mining industry: Measurement and Interpretation, Productivity Commission Staff Working Paper, December.