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Determinants of Technical Inefficiency of Handloom Weaving Industry in Kushtia District of Bangladesh: A Tobit Model Approach

Received: 14 July 2015     Accepted: 28 July 2015     Published: 11 August 2015
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Abstract

This paper is an attempt to analyze the determinants of technical inefficiency of handloom weaving units operating in Kumarkhali Upazila of Kushtia District in Bangladesh. The study is mainly based on primary data that are collected through structured questionnaire from handloom unit owners in the study area. A total of 57 handloom units are randomly selected for the study. Cobb-Douglas production function model is employed to obtain the technical efficiency of handloom units and technical inefficiency index is calculated from the obtained efficiencies. Tobit Model is used to identify the factors of inefficiency in the handloom weaving units. From the analysis, average inefficiency of handloom units in the study area is found to be 0.245. The major findings of the study show that education, experience, size of unit, and age of owners are significant factors influencing technical inefficiency of handloom weaving units.

Published in Journal of Investment and Management (Volume 4, Issue 4)
DOI 10.11648/j.jim.20150404.11
Page(s) 95-99
Creative Commons

This is an Open Access article, distributed under the terms of the Creative Commons Attribution 4.0 International License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution and reproduction in any medium or format, provided the original work is properly cited.

Copyright

Copyright © The Author(s), 2015. Published by Science Publishing Group

Keywords

Handloom Industry, Technical Inefficiency, Determinants, Tobit Model, Bangladesh

References
[1] Ahmed, M.U. (1999). Development of Small Scale Industries in Bangladesh in the New Millennium: Challenges and Opportunities. Asian Affairs, 21(1).
[2] Amemiya, T. (1973). Regression Analysis When the Dependent Variable is Truncated Normal. Econometrica, 4(6), 997-1016.
[3] Chowdhury, N. (1981). Relative Efficiency of Alternative Techniques in Cotton Weaving Industry of Bangladesh: A Case Study. The Bangladesh Development Studies, 9(3), 45-66.
[4] Coelli, T., Rao, D. S. & Battese G. E. (1998). An Introduction to Efficiency and Productivity Analysis. Kluver Academic Publishers, Norwell, MC. 1-319.
[5] Farrell, J. J. (1957). The Measurement of Productivity Efficiency. Journal of the Royal Statistical Society, Series A (120), 253-90.
[6] Featherstone, M., Allen M., Langemeier, R., and Ismet, M. (2004). A Non-parametric Analysis of Efficiency for a Sample of Kansas Beef Cow Farms. J. Agri. And Appl. Econ., 29(1), 175-84.
[7] GoB (Government of Bangladesh), Bangladesh Bureau of Statistics (BBS, 2003), Statistical Yearbook of Bangladesh.
[8] Islam, M. K. and Hossain M. E. (2014). Contribution of Factor Costs to Gross Return of Handloom Weaving Industry in Kumarkhali Upazila of Kushtia District of Bangladesh. Bangladesh Arthoniti Samity Samoyiki, 2014:41-50.
[9] Islam, M. K. and Hossain M. E. and Ghosh, B. C. (2013). Cost-Benefit Analysis of Handloom Weaving Industry in Kumarkhali Upazila of Kushtia District, Bangladesh. Development Compilation, 09(01), 64-72.
[10] Jaforulla, M. (1999). Production Technology, Elasticity of Substitution and Technical Efficiency of the Handloom Textile Industry of Bangladesh. Applied Economics, 31(4), 437-442.
[11] McKay, L. (1984). An Analysis of Assistance to Textile Weaving in Bangladesh. TIP Reform Programme, Government of Bangladesh.
[12] Rahman, A. (1980). A Study on the Relative Efficiency of Handlooms and Small Power Looms vs. Large Mills. Bangladesh Institute of Development Studies (BIDS), Dhaka, Bangladesh.
[13] Rahman M. M. (2013). Prospects of Handloom Industries in Pabna District, Bangladesh. Global Journal of Management and Business Research Interdisciplinary, 13(5), 8-18.
[14] Raihan, M. A. (2010). Handloom: An Option to Fight Rural Poverty in Bangladesh. Asia-Pacific Journal of Rural Development, 20(1), 113-130.
[15] Tanusree, S. (2015). A Study of the Present Situation of the Traditional Handloom Weavers of Varanasi, Uttar Pradesh. India International Research Journal of Social Sciences, 4(3), 48-53.
[16] Wasow, B., Farouque, A. and Gani M. O. (1984). The Effects of Policy on the Choice of Technique in Textile Weaving. TIP Reform Programme, Government of Bangladesh.
Cite This Article
  • APA Style

    Md. Khairul Islam, Md. Elias Hossain. (2015). Determinants of Technical Inefficiency of Handloom Weaving Industry in Kushtia District of Bangladesh: A Tobit Model Approach. Journal of Investment and Management, 4(4), 95-99. https://doi.org/10.11648/j.jim.20150404.11

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    ACS Style

    Md. Khairul Islam; Md. Elias Hossain. Determinants of Technical Inefficiency of Handloom Weaving Industry in Kushtia District of Bangladesh: A Tobit Model Approach. J. Invest. Manag. 2015, 4(4), 95-99. doi: 10.11648/j.jim.20150404.11

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    AMA Style

    Md. Khairul Islam, Md. Elias Hossain. Determinants of Technical Inefficiency of Handloom Weaving Industry in Kushtia District of Bangladesh: A Tobit Model Approach. J Invest Manag. 2015;4(4):95-99. doi: 10.11648/j.jim.20150404.11

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  • @article{10.11648/j.jim.20150404.11,
      author = {Md. Khairul Islam and Md. Elias Hossain},
      title = {Determinants of Technical Inefficiency of Handloom Weaving Industry in Kushtia District of Bangladesh: A Tobit Model Approach},
      journal = {Journal of Investment and Management},
      volume = {4},
      number = {4},
      pages = {95-99},
      doi = {10.11648/j.jim.20150404.11},
      url = {https://doi.org/10.11648/j.jim.20150404.11},
      eprint = {https://article.sciencepublishinggroup.com/pdf/10.11648.j.jim.20150404.11},
      abstract = {This paper is an attempt to analyze the determinants of technical inefficiency of handloom weaving units operating in Kumarkhali Upazila of Kushtia District in Bangladesh. The study is mainly based on primary data that are collected through structured questionnaire from handloom unit owners in the study area. A total of 57 handloom units are randomly selected for the study. Cobb-Douglas production function model is employed to obtain the technical efficiency of handloom units and technical inefficiency index is calculated from the obtained efficiencies. Tobit Model is used to identify the factors of inefficiency in the handloom weaving units. From the analysis, average inefficiency of handloom units in the study area is found to be 0.245. The major findings of the study show that education, experience, size of unit, and age of owners are significant factors influencing technical inefficiency of handloom weaving units.},
     year = {2015}
    }
    

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    AU  - Md. Khairul Islam
    AU  - Md. Elias Hossain
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    JF  - Journal of Investment and Management
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    AB  - This paper is an attempt to analyze the determinants of technical inefficiency of handloom weaving units operating in Kumarkhali Upazila of Kushtia District in Bangladesh. The study is mainly based on primary data that are collected through structured questionnaire from handloom unit owners in the study area. A total of 57 handloom units are randomly selected for the study. Cobb-Douglas production function model is employed to obtain the technical efficiency of handloom units and technical inefficiency index is calculated from the obtained efficiencies. Tobit Model is used to identify the factors of inefficiency in the handloom weaving units. From the analysis, average inefficiency of handloom units in the study area is found to be 0.245. The major findings of the study show that education, experience, size of unit, and age of owners are significant factors influencing technical inefficiency of handloom weaving units.
    VL  - 4
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Author Information
  • Department of Economics, University of Rajshahi, Rajshahi, Bangladesh

  • Department of Economics, University of Rajshahi, Rajshahi, Bangladesh

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