Efficiency Assessment of Indian Textile Units Using Data Envelopment and Regression Analysis

Authors

  •   Chetan A. Jhaveri Assistant Professor, Operations Management and Quantitative Techniques Area, Institute of Management, Nirma University, S G Highway, Ahmedabad – 382 481, Gujarat
  •   Gunjan Sood Assistant Professor, Operations Management and Quantitative Techniques Area, United World School of Business, Karnavati University, Gandhi Nagar – 382 422, Gujarat
  •   Riya Shah Research Scholar, Institute of Management, Nirma University, S G Highway, Ahmedabad – 382 481, Gujarat

DOI:

https://doi.org/10.17010/ijf/2021/v15i5-7/164490

Keywords:

Productivity-performance

, Efficiency, Benchmarking, Data-Envelopment-Analysis, Regression Analysis.

JEL Classification

, C61, C67, D24, L25, L6.

Paper Submission Date

, April 8, 2020, Paper Sent Back for Revision, March 25, 2021, Paper Acceptance Date, April 20, Paper Published Online, July 5, 2021.

Abstract

Firms are always in the pursuit of improvizing their performance. Optimum utilization of resources and the eradication of sources of inadequacies result in improved performance and production for manufacturing firms. Improved performance and production lead to increased efficiency for the firms. In this study, data envelopment analysis was used to evaluate the efficiency using financial data of 11 years of all the 13 S&P BSE 500 listed textile firms. Consistent with the relevant literature, three inputs (power, fuel, & water charges ; compensation to employees ; and raw materials, stores, & spares) and one output (profit before tax) were selected. Additionally, outcomes from the DEA analysis were used to perform the regression analysis. Out of the 13 units analyzed for efficiency, two textile units were found to be operating efficiently. The results of the regression analysis showed that an increase in employee compensation will lead to an increase in profit since the increase in the compensation helps to increase motivation from job satisfaction. Besides adding value to the efficiency assessment literature, the research findings of this study also provide meaningful business insights for the practitioners for improving productivity performance by finding the core action area in resource planning decisions.

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Author Biographies

Chetan A. Jhaveri, Assistant Professor, Operations Management and Quantitative Techniques Area, Institute of Management, Nirma University, S G Highway, Ahmedabad – 382 481, Gujarat

ORCID iD : https://orcid.org/0000-0002-6361-7468

Gunjan Sood, Assistant Professor, Operations Management and Quantitative Techniques Area, United World School of Business, Karnavati University, Gandhi Nagar – 382 422, Gujarat

ORCID iD : 0000-0001-9970-4734

Riya Shah, Research Scholar, Institute of Management, Nirma University, S G Highway, Ahmedabad – 382 481, Gujarat

ORCID iD : 0000-0001-8303-2363

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Published

2021-07-31

How to Cite

Jhaveri, C. A., Sood, G., & Shah, R. (2021). Efficiency Assessment of Indian Textile Units Using Data Envelopment and Regression Analysis. Indian Journal of Finance, 15(5-7), 9–25. https://doi.org/10.17010/ijf/2021/v15i5-7/164490

Issue

Volume 15, Issue 5-7, May-July 2021

Section

Articles
Crossref
Scopus
Google Scholar
Europe PMC

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