Firm specific management decisions on Total Factor Productivity Growth in Indian electronics industry during liberalisation

This paper analyses the influence of operational management decisions on Technical Efficiency Change (TEC) and Technological Progress (TP) and thereby Total Factor Productivity Growth (TFPG) in four sectors of Indian hardware electronics industry after liberalisation. A three-step approach has been followed. The steps involves estimation of a potential stochastic production function, measuring the contribution of TEC and TP to TFPG and finally analysing the influence of management decision variables on TEC and TP using a management decision model on a panel data. The sectors achieved steady TP but not TEC. Asset utilisation, vertical integration improved TP and TEC while R&D investments and technology imports proved costly.