ABSTRACT
There are several conceptual frameworks that can be used to explain the survival of the jute industry in post-independence India even with drastic changes in packaging, storing and transporting technology. One of them is the use of a vintage model: as older vintages of capital equipment are retired, newer and more productive arrays of capital, embodying new technologies, allow the firms using them to win the competitive game (Johansen, 1959; Solow, 1960). The second is the Marx-Schumpeter vision of creative destruction under which the nature of products, production methods, sources of raw materials, the destinations of products and organization of the firms change under the pressure of competition (Schumpeter, 1947). However, it is important to find out the degree of efficiency with which surviving firms are utilizing the inputs available to them. In fact, survival critically depends on whether a firm can use the inputs available so to maximize the value-added. This study is an attempt to enquire into the survival of jute mills by carrying out empirical estimates of efficiency of Farrell (1957) type and of technical change.
