Productivity, Energy Intensity and Output: A Unit Level Analysis of the Indian Manufacturing Sector

• DOI: 10.1007/s40953-016-0034-7
• Publication Date: 2016-03-07T00:55:45Z
• Authors: Santosh Kumar Sahu; Himani Sharma
• Keywords: Intensity; Manufacturing sector; Manufacturing

The objective of this study is to calculate total factor productivity and determine factors related to energy intensity for the pre-existing manufacturing plants in India, using data from the annual survey of industries from 2002 to 2008. We use Levinsohn and Petrin (Rev Econ Stud 70:317–342, 2003) technique to estimate total factor productivity. The results indicate that most of the industries achieved positive TFP growth except a few, and thus, within plant efficiency exists in the Indian manufacturing sector. In case of determinants of energy intensity, we found plants with higher TFP and higher output are energy efficient. Also, there exists a nonlinear relationship between energy intensity and output, which validates the productivity dilemma hypothesis for the Indian manufacturing sector.