Abstract
Micro enterprises create the strength of an economy in maintaining an appreciable growth rate and in creating employment preambles. The sector has been regarded as an instrument of economic growth and social development in developing countries like India. This study is an attempt to focus on the technical efficiency (TE) of micro, small and medium enterprises (MSMEs) enterprise sugar mills in Maharashtra and Uttar Pradesh. The result indicates that the production function is operating under constant returns to scale. Over the period, age (number of years in operation) factor has an inverse effect on efficiency level. Ownership plays an important role in Maharashtra as compared to Uttar Pradesh. The ‘likelihood ratio’ suggests that time-decay model is preferred over time-invariant technical inefficiency. The average TE of Maharashtra and Uttar Pradesh is 66 per cent and 64 per cent, respectively. MSMEs sugar mills of Maharashtra are more efficient than sugar mills in Uttar Pradesh.
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