India is the world’s third largest producer of cotton and second largest producer of cotton yarns and textiles. The Industry was de-licensed in 1991-92 and it lead to various structural changes in this industry. This study aims to compare the performance (in terms of return on capital employed) of firms incorporated before liberalization and firms incorporated after liberalization in Indian cotton textile industry. This study also intended to study the impact of marketing expenses, wages & salary and Age on explaining the variances in the firm performance (in terms of net sales of the firms) across various groups of the firms.
Table of Contents
Introduction: Overview of the Indian Cotton Textile Industry
Indian textile industry and Governmental Policy
Current Scenario of the Industry
Indian Cotton Textile Industry and Vision 2010
Plus and Minus of the Indian Cotton Textile industry
Importance / Need of the Study
Objectives & Hypothesis
Literature Review
Data and Research Methodology
Result and Interpretation
Independent Sample T- Test: Performance Comparison
Regression Analysis:
Conclusion
Limitations of the Study
Research Objectives and Key Themes
This study investigates the performance of firms within the Indian cotton textile industry, specifically comparing entities incorporated before and after the 1991-92 economic liberalization. Beyond performance benchmarking using Return on Capital Employed (ROCE), the research explores how variables such as marketing expenses, wages and salaries, and firm age impact net sales across different firm size categories.
- Economic impact of trade liberalization on Indian textile firms.
- Performance comparison based on firm incorporation date.
- The influence of marketing expenditure and labor costs on firm performance.
- Analysis of firm size (high, medium, low) as a moderating factor.
- Role of firm age in explaining variances in revenue.
Excerpt from the Book
Introduction: Overview of the Indian Cotton Textile Industry
The textile industry holds an exceptional place in Indian economy because of its contribution to the GDP, employment generation and forex earning. One of the earliest to come into existence, Indian textile industry is one of the economy’s largest industrial sector. In 2000 - 01, the textile and garment industries accounted for about 4 percent of GDP, 14 percent of industrial output, 18 percent of industrial employment, and 27 percent of export earnings. India’s textile industry is also significant in a global context, ranking second to China in the production of both cotton yarn and fabric and fifth in the production of synthetic fibers and yarns. It offers direct employment to about 35 million people and to another 50 million people in related area. It can be inferred that one out of every six Indians are directly or indirectly associated with this industry. This industry offers one of the most basic needs of the people i.e. clothing and helps in improving the quality and standard of life. From the production of raw input to the delivery of the finished products with substantial value addition at each and every stage of processing, that is why it has distinctive position as a self – reliant industry. Its vast potential for creation of employment opportunities in the agricultural, industrial, organized and decentralized sectors & rural and urban areas, particularly for women and the disadvantaged is noteworthy.
Summary of Chapters
Introduction: Overview of the Indian Cotton Textile Industry: Provides a historical and economic overview of the Indian textile sector, highlighting its contribution to GDP and employment.
Indian textile industry and Governmental Policy: Details the transition of the industry since de-licensing in 1991-92 and discusses the objectives of the Textile Policy 2000.
Current Scenario of the Industry: Discusses the competitive environment for the Indian textile industry post-MFA and the impact of global quota removals.
Indian Cotton Textile Industry and Vision 2010: Outlines governmental goals for export growth and industry modernization by 2010.
Plus and Minus of the Indian Cotton Textile industry: Analyzes the structural strengths and infrastructural challenges facing the Indian textile sector.
Importance / Need of the Study: Justifies the research need due to a lack of studies on the post-liberalization performance of the textile sector.
Objectives & Hypothesis: Defines the research objectives and proposes hypotheses regarding performance differences based on firm incorporation timing.
Literature Review: Reviews existing academic perspectives on trade liberalization and its effect on firm profitability in emerging markets.
Data and Research Methodology: Explains the criteria for data collection, firm classification by size, and the application of T-tests and regression models.
Result and Interpretation: Presents the statistical findings from T-tests and multiple regression analyses.
Conclusion: Summarizes the key findings, including the lack of significant performance differences based on incorporation timing and the influence of marketing on sales.
Limitations of the Study: Acknowledges the constraints regarding the data source and the generalizability of the findings.
Keywords
Indian Cotton Textile Industry, Trade Liberalization, Firm Performance, ROCE, Net Sales, Marketing Expenses, Wages and Salary, Firm Age, Economic Reform, Multiple Regression, Post-MFA, Emerging Markets, Corporate Profitability, Industrial Policy, Size Classification
Frequently Asked Questions
What is the primary focus of this study?
The study examines the Indian cotton textile industry, specifically analyzing whether firm performance varies based on whether a firm was established before or after the 1991-92 economic liberalization.
What are the central thematic fields covered?
The research covers trade liberalization, the impact of marketing and labor costs on revenue, and the role of organizational size and age in firm performance.
What is the core research objective?
The objective is to compare the performance of firms incorporated before and after liberalization and to determine how specific financial variables explain variances in net sales.
Which scientific methodology is employed?
The study uses empirical analysis, employing independent sample T-tests to compare performance and multiple regression models to examine the relationship between independent variables and net sales.
What topics are discussed in the main body?
The main body covers the economic landscape of the Indian textile industry, a review of relevant literature on liberalization, methodology, and detailed regression results across different size categories.
Which keywords characterize this research?
Key terms include Indian Cotton Textile Industry, Trade Liberalization, Return on Capital Employed (ROCE), Marketing Expenses, and Firm Performance.
Did the study find significant differences between older and newer firms?
No, the study concluded that there is no significant difference in the performance of firms incorporated before and after liberalization regarding their return on capital employed.
What impact does firm age have on performance?
The study found that firm age is not significant in explaining the variance in performance in terms of net sales within the Indian textile industry.
How does marketing expense influence net sales?
The regression results generally show that marketing expenses have a significant positive impact on net sales for most firm categories, with notable exceptions.
- Quote paper
- Prof. Kunal Gaurav (Author), 2007, Performance comparison and study the impact of marketing expenses, wages & salary and age on the firm performance in Indian Cotton Textile Industry, Munich, GRIN Verlag, https://www.grin.com/document/187127
