The Sources of Cost Advantage in Selected INDIAN Manufacturing Industries

The study demonstrates the fact that the majority of the Indian manufacturing industries have decreased their real unit cost by the benefits of economies of learning and economies of scale during 1991 – 2001. The study also shows that high and low concentrated industries are equally enjoying benefits of economies of scale but high concentrated industries are enjoying more of the benefits of economies of learning as compared to low concentrated industries. The results support the hypothesis that high concentrated industries enjoy more cost advantage than low concentrated industries. The results also indicate that Indian firms must pay more attention to the benefits of economies of learning (dynamic economies of scale) to promote their competitiveness in domestic and international markets otherwise they may lose their market share in the markets.