Profit efficiency and market concentration an interstate analysis of Indian leather industry

Abstract

The present study is an endeavour to analyse the profit efficiency of the Indian leather industry (1986-2016) and study relationship between profit efficiency and market concentration using Window Data Envelopment Analysis. The empirical results show that the Indian leather industry is only 24 percent profit efficient. The profit inefficiency is found to be attributed to cost inefficiency, cost inefficiency is the result of overall technical inefficiency and the overall technical inefficiency is on account of managerial inefficiency. The Indian leather industry has been operating under increasing returns to scale. Profit efficiency is significantly affected by market concentration. There is cause and effect relationship between profit efficiency and market concentration. newline