Projection pursuit regression and disaggregate productivity effects: the case of the Indian blast furnaces

Productivity of blast furnaces in India is studied by disaggregating the production process and the utilization process. A dimension-reducing nonparametric approach-projection pursuit regression-is used. We find that productivity can be increased significantly by improving the quality of coal. There is no evidence that executives have a positive marginal product. The production workers have a negative marginal product for the production process and a positive one for the utilization process. But the training of executives has a positive effect whereas that of the production workers has a negative effect on productivity. Copyright © 2004 John Wiley & Sons, Ltd.