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Efficiency measurement of pharmaceutical industry using the malmquist total productivity index

The pharmaceutical industry of Bangladesh is now meeting around 97% of total domestic demand with an annual two digit growth rate. But the question arises as to whether the firms produce efficiently? The paper measures technical efficiency of the pharmaceutical industry of Bangladesh using Data Enve...

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Main Authors: Doraisamy, S.M., Azad, A.K.
Format: Conference or Workshop Item
Language:English
Published: 2014
Subjects:
HA Statistics
Online Access:http://eprints.um.edu.my/13602/1/EFFICIENCY_MEASUREMENT_OF_PHARMACEUTICAL_INDUSTRY.pdf
http://eprints.um.edu.my/13602/
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spelling my.um.eprints.136022015-06-17T01:55:51Z http://eprints.um.edu.my/13602/ Efficiency measurement of pharmaceutical industry using the malmquist total productivity index Doraisamy, S.M. Azad, A.K. HA Statistics The pharmaceutical industry of Bangladesh is now meeting around 97% of total domestic demand with an annual two digit growth rate. But the question arises as to whether the firms produce efficiently? The paper measures technical efficiency of the pharmaceutical industry of Bangladesh using Data Envelopment Analysis (DEA) over a period of 2009 to 2013. We use the non-parametric DEA with one output- annual sales and three inputs; viz. (i) fixed asset; (ii) raw material cost; and (iii) cost of salary. Results of the analysis reveal that Malmquist total factor productivity index (TPI) has maintained a slightly upward trend during the study period with a value of 4.7% annually. It has also been observed that the major contributor of TPI growth is technological change with a value of 10.8% positive growth annually. Additionally, all changes of technical efficiency; pure efficiency and scale efficiency have regressed with values of 5.5%, 2.1% and 3.5% respectively. The overall productivity progress was due to technological progress and an overall efficiency regress. Thus, the gains in productivity are entirely due to technological advancements, and not efficiency improvement. The main source of inefficiency in pharmaceutical industry is scale inefficiency rather than pure technical inefficiency. 2014-04 Conference or Workshop Item PeerReviewed application/pdf en http://eprints.um.edu.my/13602/1/EFFICIENCY_MEASUREMENT_OF_PHARMACEUTICAL_INDUSTRY.pdf Doraisamy, S.M. and Azad, A.K. (2014) Efficiency measurement of pharmaceutical industry using the malmquist total productivity index. In: Proceedings of the 12th International Conference of DEA, 14-17 Apr 2014, Kuala Lumpur.
institution Universiti Malaya
building UM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Malaya
content_source UM Research Repository
url_provider http://eprints.um.edu.my/
language English
topic HA Statistics
spellingShingle HA Statistics
Doraisamy, S.M.
Azad, A.K.
Efficiency measurement of pharmaceutical industry using the malmquist total productivity index
description The pharmaceutical industry of Bangladesh is now meeting around 97% of total domestic demand with an annual two digit growth rate. But the question arises as to whether the firms produce efficiently? The paper measures technical efficiency of the pharmaceutical industry of Bangladesh using Data Envelopment Analysis (DEA) over a period of 2009 to 2013. We use the non-parametric DEA with one output- annual sales and three inputs; viz. (i) fixed asset; (ii) raw material cost; and (iii) cost of salary. Results of the analysis reveal that Malmquist total factor productivity index (TPI) has maintained a slightly upward trend during the study period with a value of 4.7% annually. It has also been observed that the major contributor of TPI growth is technological change with a value of 10.8% positive growth annually. Additionally, all changes of technical efficiency; pure efficiency and scale efficiency have regressed with values of 5.5%, 2.1% and 3.5% respectively. The overall productivity progress was due to technological progress and an overall efficiency regress. Thus, the gains in productivity are entirely due to technological advancements, and not efficiency improvement. The main source of inefficiency in pharmaceutical industry is scale inefficiency rather than pure technical inefficiency.
format Conference or Workshop Item
author Doraisamy, S.M.
Azad, A.K.
author_facet Doraisamy, S.M.
Azad, A.K.
author_sort Doraisamy, S.M.
title Efficiency measurement of pharmaceutical industry using the malmquist total productivity index
title_short Efficiency measurement of pharmaceutical industry using the malmquist total productivity index
title_full Efficiency measurement of pharmaceutical industry using the malmquist total productivity index
title_fullStr Efficiency measurement of pharmaceutical industry using the malmquist total productivity index
title_full_unstemmed Efficiency measurement of pharmaceutical industry using the malmquist total productivity index
title_sort efficiency measurement of pharmaceutical industry using the malmquist total productivity index
publishDate 2014
url http://eprints.um.edu.my/13602/1/EFFICIENCY_MEASUREMENT_OF_PHARMACEUTICAL_INDUSTRY.pdf
http://eprints.um.edu.my/13602/
_version_ 1643689598004494336
score 13.211869

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