ABSTRACT
Empirical analysis in this study employ 940 observations, spread over seven-year period (2000/ 2001-2006/2007), from a sample of 178 machinery manufacturing firms identified mainly with the help of facilities in PROWESS. The sample includes those firms for which data on each of the variables used for the study are available in PROWESS for at least two years of the study. Besides, the sample excludes sick companies i.e. the companies with non-positive networth in a FY for two reasons: (i) with a view to remove probable outlier effect on the empirical analysis and (ii) the financial statements of sick companies cannot be trusted as many promoters declare their companies sick to obtain the benefits of rehabilitation package, delay the payment of dues to or prevent strong recovery actions from the financial institutions. Thus, the number of sample firms get reduced than that covered in the PROWESS database. Out of the aggregate PROWESS data of IMI on sales turnover, networth, gross fixed assets, total assets, exports and imports, respectively, the sample firms shared 68% of sales turnover, 85% of networth, 74% of gross fixed assets, 69% of total assets, 66% of exports and 74% of imports, where data on each variable are averaged over 2000/2001-2006/2007. Considering the fact that PROWESS covers almost entire corporate sector and 70% of the manufacturing activity, this sample with such shares can be considered as the good representative of the IMI.
