posted on 2024-09-05, 22:23authored byAnup Kumar Bhandari
Indian leather industry has massive potential for generating
employment and achieving high export-oriented growth. However, the
on-going global economic slowdown and the wide erratic behaviour of
the overall weather condition particularly in the Europe pose both threat
(of market loss) and opportunity (to gain some unanticipated demand in
the market) before it. On the other hand, its economic performance has
not been assessed much till date. The present paper attempts to fill in
this gap and makes some suggestions regarding the expansion of the
industry by examining technical efficiency (TE) of individual leather
producing firms for some selected years since the early-1980s. Analysing
the industry’s firm-level data through the Data Envelopment Analysis
the paper observes a significant positive association between a firm’s
size and its TE, but no such conclusive relation between a firm’s age and
TE. It also finds significant variation in TE across firms in different
groups of states as well as under different organisational structures.
Although, non-availability of panel data does not allow one to assess
the trend of the performance of the Indian leather firms properly, the
average firm-level TE, however, seems to be on an increasing path,
except for downswing in some years. On a totality, analysing the relevant
supply side factors the paper proposes the policy makers to go forward
in expanding the industry particularly keeping India’s severe
unemployment problem, of both skilled as well as unskilled labour
forces, in mind.
Key Words: Leather industry; Data Envelopment Analysis, Technical Efficiency, Scale Efficiency, Returns to Scale.
JEL Classification No: D24, L67, R38.
History
Publisher
Centre for Development Studies
Citation
Ghandari, Anup Kumar (2010) Global crisis, environmental volatility and expansion of the Indian leather industry. CDS working papers, no.426. Trivandrum: CDS.