ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Productivity in Indian Chemical Sector

The present study attempts to test the assumption of homogeneity of the sub-sectors in an industry with particular reference to the Indian chemical industry. The impact of economic reforms on the productivity levels of an industry at the aggregate and sub-sectors level do vary significantly. While the net impact of the reform process on total factor productivity growth was found to be poor at the aggregate level, the sub-sectors - drugs and pharmaceuticals and paints and varnishes, basic chemicals and dyes and dye stuff industries - greatly benefited from the liberalisation process. Within the sub-sectors, the worst affected was the fertiliser industry as the TFPG declined significantly in the post-reform period. In the same way, the productivity differentials are found at the firm level as well. While small firms experienced a fall in productivity levels during the post-reform period, the large firms could raise productivity. The differences in the productivity levels of small and large firms and among the sub-sectors within an industry reveal the heterogeneity of the industry.

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