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Title: Productivity trends and determinants of Indian textile industry: A disaggregated analysis
Authors: Dhiman R
Sharma M.
Keywords: Labour productivity
Capital Productivity
Exchange Rate.
Issue Date: 2017
Publisher: Serials Publications
Abstract: The textile industry is major contributor towards the economy of the nation. Textile Export Committee identified labour productivity and capital productivity as major determinants of Indian textile industry. So the present paper is an attempt to study productivity trends and growth performance of textile industry at disaggregated level. The present paper is divided in to three sections. Section-I of the paper focus upon the growth performance of Textile industry and its groups Textile and Textile Products. The growth performance has been measured in terms of number of factories, gross value added, number of employees and capital stock. Section-II of the paper makes an attempt to analyse the productivity trends i.e. labour productivity and capital productivity at disaggregated level and also analyses the effects of determinants such as labour productivity (LP), capital productivity (CP), unit labour cost (ULC), exchange rate (ER) and real effective exchange rate (REER) on the export competitiveness (EC). Design/Methodology: The present study examines the productivity trends and effects of determinants on export competitiveness at disaggregated level. The textile industry has been divided in to two groups �Textile� and �Textile Products�. Regression analysis has been done using E views 8 to analyse the impact of various determinants on export competitiveness of textile industry and its 02 groups textile and textile products. The goodness of fit is also tested by examining serial correlation, heteroskedasticity and normal distribution among the residuals. Findings: Sharp decline in the growth rate of labour productivity and capital productivity in �Textile Products� group is observed which appeared to be a big concern, given the fact that the global market is getting more competitive and it requires to be more productive and capital intensive. The results of regression analysis showed high r square values in all the three groups namely �textile industry�, �textile� group and �textile products� group. The regression model is also found to be good fit as all the conditions of good regression model are satisfied. JEL Classification: J24; F31; H54. Keywords: Labour productivity, Capital Productivity, Exchange Rate.
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