ABSTRACT
The chapter shows how the variations in Total Factor Productivity Growth (TFPG) of different manufacturing industries are estimated using non-parametric approach. Data Envelopment Analysis (DEA) is applied to measure the Malmquist Productivity Index (MPI) introduced by Caves, Christensen and Diewert. An extensive discussion on this methodology can be found in Ray. The use of distance function permits to directly incorporate changes in the level of technical efficiency as an important component of productivity changes between years. A second-stage regression analysis is performed to explore the impact of trade-liberalization on TFPG by taking into account some trade related variables like, effective rate of protection, import coverage ratio, import penetration ratio, real effective exchange rate along with some other factors coming from industrial characteristics like, firm size, degrees of concentration, level of technology and also economic socio- political variable like movement of wage rates as determinants of TFPG.
