Chapter 18: Measuring TFPG and Its Components Using Frontier Approaches: A Study of 4-Digit Manufacturing Industries of Chemical and Chemical Products in India

The study estimates total factor productivity growth (TFPG) and its components of the 4-digit manufacturing industries of chemical and chemical products in India from 1998–1999 to 2017–2018, pre-economic crises period (from 1998–1999 to 2007–2008) and post-economic crises period (from 2008–2009 to 2017–2018) using frontier approaches, that is, data envelope analysis DEA and stochastic frontier approach (SFA). The components of TFPG are technological progress (TP), technical efficiency change (TEC) and economic scale change (SC). It is found that the growth rates of total factor productivity (TFP) in most of the 4-digit industries of chemical and chemical products in India increased during the post-economic crises period (from 2008–2009 to 2017–2018) and the increase in TFPG of them during that period is mainly accounted for by the increase in TP of the same during that period. The TEC of almost all the industries remains the same, however, declined during the post-economic crises (from 2008–2009 to 2017–2018) and SC of them remains very low or even negative during the aforementioned study periods.