SMART JOURNAL OF BUSINESS MANAGEMENT STUDIES	VOL. 9	NO. 2	PAPER 4
ENVELOPMENT ANALYSIS AND MALMQUIST TOTAL FACTOR PRODUCTIVITY INDEX: AN APPLICATION TO INDIAN AUTOMOBILE FIRMS
A. Vijayakumar
Associate Professor in Commerce, Erode Arts and Science College (Autonomous), Erode, Tamil Nadu
India’s Economic Reforms(1991) allowed more competition and increased provisions for the entry of new domestic firms and Multi-National Companies(MNCs) in the manufacturing sector. Therefore, it is the need of the hour to assess the TFP and identification of the factors that account for productivity changes. In this study, an attempt has been made to assess the effects of economic reforms on productivity growth in Indian automobile companies using Malmquist Productivity Index by decomposing the TFP change into technical and efficiency changes. The results of the study showed that most of the Indian automobile companies must increase their TFP and efforts must be made to provide a stable pattern to the productivity growth. The benefits of technological progress were not converted into productivity gains as there was no improvement in efficiency in the reform period. The results of the study suggest that there is need for the implementation of specific policies to improve technical progress and efficiency change, in order to bring about a long-run balance in TFP growth.

KEYWORDS: Productivity, Scale Efficiency, Malmquist Productivity Index, Indian Automobile Industry, Technology Adoption, Managerial Efficiency Growth

JEL CLASSIFICATIONS: L62, O31, O39

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