Total Factor Productivity and Energy Intensity in Indian Manufacturing: A Cross-Sectional Study

Abstract

The objective of the paper is to estimate the transcendental logarithmic production function and further study the determinants of total factor productivity (TFP) of Indian manufacturing industries. The estimation of TFP is based on four inputs model, where apart from labour and capital, material and energy are the other two inputs. The findings of the paper suggest that labour and material inputs play major role as compared to the capital and energy input. Age of the firm, ownership, energy intensity, embodied and disembodied technology imports, research and development and exports were considered as the possible determinants of the TFP in the second stage regression. The finding of the estimates suggest that age of the firm, export intensity and disembodied technology import are positively related to the TFP, where ownership, energy intensity, embodied technology import and R&D intensity are negatively related to the TFP of the firms for Indian manufacturing.Keywords: Production function; Total Factor Productivity; Energy Intensity; Indian Manufacturing IndustriesJEL Classifications: B3; D24; Q4