TITLE:
Does Size Matter?—The Effect of Size of Production Workers, Management Staff and Proprietors on Productivity
AUTHORS:
Awadhesh Pratap Singh
KEYWORDS:
TFP, Labor Productivity, Output, FMOLS
JOURNAL NAME:
Theoretical Economics Letters,
Vol.8 No.11,
August
15,
2018
ABSTRACT: The importance of production workers is widely
acknowledged in Industrial Economics. With respect to India where many
industries are dominated by large family owned enterprises, this paper analyzes
the impact of the size of production workers, management staff and proprietors
on productivity for 11 manufacturing industries aggregated for 20 major states of
India. The paper employs latest econometric techniques namely, panel
cointegration and FMOLS that deals with widely known non-stationary and
endogeneity issues in panel data. The results show that Indian manufacturing
sector is highly sensitive to production workers and management staff. The
externalities of production workers and management staff on TFP, output and
labor productivity are consistently significant across the models. The
significance to proprietors is found neither consistent nor significant.