Are Indian Firms too Small? A Nonparametric Analysis of Cost Efficiency and Industry Structure of Indian Manufacturing

In this paper we use the 2004-05 Annual Survey of Industries data to estimate the levels of cost efficiency of Indian manufacturing firms in the various states and also get state level measures of industrial organization (IO) efficiency. The empirical results show the presence of considerable cost inefficiency in a majority of the states. Further, we also find that, on average, Indian firms are too small. Consolidating them to attain the optimal scale would further enhance efficiency and lower average cost.

Productivity and Market Integration in American Communal Dairying, 1830-1875

In our late twentieth century experience, survival of an economy seems critically dependent on well established rights to private property and a return to labor that rewards greater effort. But that need not be so. History provides examples of micro-socialist economies that internally, at least, allow for little private property for participants and a constant return to labor that is independent of effort. Some such economies may even be termed 'successful,' if success is taken to mean survival over several generations. If these communities survived without conditions that are generally thought to be necessary for success, a question worth asking is how this occurred, for we can then shed some light on what really is necessary for economic survival. Addressing this issue emphasizes the critical role of time, for even if the microsocialist economies that we study here eventually became the merest shadow of their former selves, the fact that they did flourish for so long makes them a valuable counterexample, and hence, a phenomenon in need of explanation. We consider here the dairy industry of the Shakers, which was characterized by intensive efforts to increase productivity, in part through the use of market signals, but efforts that were also limited by the ideological goals of the community. The Shakers were (and are, but since it is the historical Shakers that concern this paper, the past tense will be used) a Christian communal group. Some of their distinctive beliefs included the existence of a male and female Godhead, from which followed sexual equality, and active communication between Believers (a Shaker term for members of the sect) and denizens of the spirit world. Practices of the Society (their official name is the United Society of Believers in Christ's Second Appearing, the second appearing being in the body of their foundress, an illiterate Englishwoman named Ann Lee) included pacifism, celibacy, confession of sins to elders, and joint or communal ownership of the Society's assets. Each Shaker received the same return for his or her labor: room, board, clothing, and the experience of divine proximity in a community of like minded Believers (Stein 1992).