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Measuring Technology Differences across Football Manufacturers in Sialkot

Tariq Raza and Azam Chaudhry, Lahore School of Economics

The existing literature shows that SMEs are more inclined towards labor-intensive technologies, whereas larger enterprises are more capital intensive which is one reason why production capacity varies across different sized firms [You (1995), Kitching (1982)]. Firms operate under different environment and SMEs may experience conditions and circumstances which may differ with the settings in which larger firms function. For instance, SME’s may face certain constraints which, relatively considering may not be that big an issue for larger firms [Yang et.al (2007)]. Given that firms function in dissimilar environment, a major concern may be; are smaller firms less efficient and/or are smaller firms not rational in their decisions?

An interesting case study in the context of Pakistan is the production of footballs which is focused in the city of Sialkot. China and Pakistan are considered the world’s pre-eminent experts on football production. Both countries have proven to be a chief source of inflatable balls (of which footballs are the largest single component) for premier global brands [Atkin et.al, 2015a]. Sialkot possesses a niche for high-quality hand stitched footballs [Golvine et. al, 2015]. Sialkot’s commendable market position in the premium hand-stitched footballs is being abraded with the presence of hand-stitching production in China [Nadvi, 2011]. Khalid Nadvi writes, “What has not been studied at any length is the nature of technological change within the industry, and its consequences for, inter alia, the geography of production. This has implications for the local industry and its ability to retain its global position.”

Football industry is season dependent [mainly due to major football events]. Thus it is imperative for local producers to become adept in aggrandizing production volumes during periods of high football demand. For this paper we will only focus on the 32-panel, size 5 football, which to date remains the most commonly produced football.

We plan to address the issue of technological differences across firms by focusing on a sample of football manufacturers in Sialkot. In particular, we plan to look at the differences in the cutting process across these firms and then measure how far each firm is from an efficiency frontier based on the cutting technology they use. Using our data, we will estimate levels of technical efficiency across firms, where this is defined as “the ability to minimize input use in the production of a given output vector, or the ability to obtain maximum output from a given input vector”, [Lovell et. al (2000)].

For the conference paper, we plan to proceed in the following manner:
  • Give a brief historical description of how Sialkot’s sports sector developed and the role of factor accumulation in the advancement of football industry.
  • Explain the production process common across all firms.
  • Define a theoretical framework for predicting production capacity of each type of cutting machine currently prevalent in the football sector.
  • Use video evidences to construct production frontier for each type of cutting technology.
  • Discuss the changes in the cutting technology overtime.
Use a technology output capacity model to determine production frontiers for different firms across the industry and compare them with each other in order to come up with relative technical efficiencies.

Bio

Dr. Azam Chaudhry is Professor of Economics at the Lahore School and the Dean of the Economics Faculty. He has a B.Sc. (Hons.) in Economics from London School of Economics where he specialized in Monetary Economics, Econometrics and Corporate Finance and a M.A. and Ph.D in Economics from Brown University, USA. He joined the Lahore School of Economics in 2005 and before that he worked for the World Bank. His areas of interests are International Trade, Macro Economics and Economic Growth. His current research projects are: Spillovers in technology adoption: evidence from a randomized experiment in Pakistan and Effects of external migration on school enrollments, accumulated schooling and dropouts in Punjab.


He teaches Econometrics and Macroeconomics at the Lahore School and his research interests include Innovation and Technological Change, Institutional Economics, Economic Growth and Development, Political Economy and Empirical Macroeconomics and Microeconomics.

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posted by S A J Shirazi @ 3/24/2016 01:29:00 PM,

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