Paper Details
Title Instability of Textile Production in Pakistan: Stochastic Frontier Model Approach

Textile industry is the largest industry of Pakistan and like other industries it is facing not only high and escalating cost of electricity and gas but also lack of market access. This study has computed production uncertainty (PU) due to technical inefficiency (TIE) of textile exporting and manufacturing (TEM) firms in Pakistan. We has obtained data from annual reports of 98 companies for the year 2017-18. We has applied stochastic production frontier approach with half normal distribution of ui. PU with confidence bounds had been computed. Inefficiencies (ui/εi) were statistically significant at 5 % level of significance. The mean PU was 0.0045. The computed scores of PU of TEM firms in Pakistan during 2017-18 showed that maximum numbers of firms had their PU score low and close to minimum PU score and very few firms had high PU score and close to maximum PU score.
Keywords: Textile Manufacturing Firms, Production Uncertainty, Technical Inefficiency, Confidence Bounds, MLE Technique, Cobb-Douglas Production Function.

Pages 256-269
Volume 9
Issue 4
Part 2
File Name Download (164)
DOI 10.30543/9-4(2020)-22