Productivity growth, efficiency change and source of inefficiency: Evidence from the Indian automobile industry

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This paper investigates the productivity growth and efficiency change of selected automobile industry in India during 2009–2015. This study uses data envelopment analysis (DEA) technique to measure the productivity growth and efficiency change. The empirical findings suggest that the segments of the automobile industry, i.e., passenger vehicles, commercial vehicles and two wheelers have positive productivity growth in the recent period. However, our study found that commercial vehicles are more efficient as compared to passenger vehicles and two wheelers firms. Further, by applying DEA multistage approach to examine the sources of inefficiency. Our results reveal that excess inputs in near about 50% firms are cause of inefficiency and these inefficient firms can become efficient by targeting the peer group with the help of reducing the input sets which are overused in the production process. Copyright © 2018 Inderscience Enterprises Ltd.