Technical efficiency and its determinants of handloom micro-enterprises in the Indian state of Assam: a two-stage double-bootstrap DEA approach

Abstract

Purpose This paper aims to estimate the technical efficiency (TE) and its determinants in the handloom micro-enterprises of Assam (India) using the double-bootstrap data envelopment analysis (DEA) technique. Design/methodology/approach The study uses a random sample of 340 handloom micro-entrepreneurs from the three districts of Assam in India. The double-bootstrap DEA was used to calculate the TE and its determinants. Findings The findings reveal that handloom enterprises are only 60% technically efficient, suggesting room for improvement. The bootstrap truncated regression results demonstrate that the handloom firms’ TE is influenced by both entrepreneur-specific and firm-specific factors. Practical implications The implication lies in the fact that the management of a firm may figure out how much it can reduce its input utilization to produce the existing amount of output so that it can move along the TE ladder. Moreover, it can crosscheck the factors to weed out inefficiency. Originality/value This paper has made two significant contributions to the extant literature. Firstly, it fills the gap by way of accounting the TE of handloom micro-enterprises, which has so far been neglected. Secondly, it used the bootstrap approach, which otherwise is very rare in the discourse on the Indian manufacturing industry, let alone in the micro, small and medium scale enterprises sector.