ABSTRACT

Chapters 9 and 10 deal with the issues of efficiency of the sample firms at the point of time of the survey. The two chapters involve two different approaches to the problem which are best regarded as complimentary. The present considers the extent and determinants of capacity utilization – the extent to which the firms are from attaining the full potential output from the use of the inputs they do in fact use. The data on this variable as well as on its determinants are based on responses given to the questionnaire addressed to the managers. By contrast, Chapter 10 is a more “objective” approach to the question of technical efficiency – how far individual firms are away from the most efficient of the sample, which defines the “frontier.” The estimations are based on econometric techniques and fitting production functions to the observed use of inputs.