Tag
total_factor_productivity
3 findings
Firms & operationsCross-Country Productivity Dispersion and Management GapIndia's total factor productivity is approximately 40% of the US level; the 90th-to-10th percentile total factor productivity ratio is 5.0 in India and 4.9 in China versus 2.0 in US manufacturing; Indian manufacturing firms averaged a management score of 2.69 compared to 3.33 in the US due to a thick long tail of badly run plants.Observational StudyFirms & operationsProductivity and Profitability Payoffs of Lean OperationsAdopting lean operational practices raised total factor productivity (TFP) by 17% in the first year (p = 0.061; IV coefficient = 0.477, p < 0.05), reduced quality defects by 43%, cut yarn inventory by 21.7%, and generated $325,000 in net annual profit per plant.RCTFirms & operationsHigh First-Year Return on Management ConsultingExperimental treatment plants increased output by 9.4%, increased Total Factor Productivity by 16.6%, and expanded annual plant profit by approximately $325,000, representing an average 130% one-year return on the market cost of consulting services.RCT