Technical Efficiency and Its Dynamics in Indian Manufacturing: An Inter-State Analysis

This paper analyzes state level data from the manufacturing sector in India for the period 1986-87 to 1999-00 to study the efficiency dynamics of a "typical" firm in individual states during the pre- and post reform years. Using the non-parametric method of Data Envelopment Analysis we utilize super-efficiency models to rank the states in terms of their performance and investigate the dynamics of the efficiency rankings over time. We find no major change in the efficiency ranking of states after the reforms. Nor is there any evidence of convergence in the distribution of efficiency in the post-reform period.