MEASURING EFFICIENCY OF MANUFACTURING INDUSTRIES IN PAKISTAN: An Application of DEA Double Bootstrap Technique

This is the very first study, which analyzes technical efficiency and its sources for the large scale manufacturing industries (LSMI) of Pakistan through DEA double bootstrap technique. First, we applied bootstrapped DEA technique for measuring bias-corrected technical efficiency scores by utilizing four inputs and one output. Finally, we employed the bootstrapped truncated regression model for determining the sources of technical efficiency. It is found that industries should reduce their size as there is evidence of diseconomies of scale in our results. Average wage as a measure of workers skill level has positive impact on technical efficiency. Finally market size does not have any significant impact in regression analysis.