DETERMINANTS OF COST EFFICIENCY OF FIRMS: A STUDY OF SELECTED CONSUMER GOODS FIRMS IN INDIA

This study deals with the determination of cost efficiency of selected firms of consumer goods-based industries in India during 2006-17 using data envelopment analysis taking labor and capital as input variables and volume of sale as output variable. After which, the cost efficiency score is regressed on parameters like size of the firm, return on assets, return on equity and return on sales. The study concluded that apart from return on assets, all the parameters are statistically significant. Size of the firm and return on sales are contributing positively for determination of efficiency of the selected firms whereas return on equity is negatively related to the cost efficiency of the firms.