Abstract:
The last two decades have witnessed a remarkable spread of technology in all spheres of economic activity. The change has been so rapid that firms are finding it difficult to keep pace with ever-changing market situations. The issue of technology adoption and technology mapping is particularly relevant for export-oriented manufacturers who face tough competition in international markets and must maintain a competitive edge by adopting latest product and process technologies to meet the requirements of upscale global markets. It is generally believed that Pakistani firms have lagged behind their competitors in international markets in terms of technological advancement and consequently Pakistan’s exports continue to remain concentrated in low value-added and low quality product segments. This study is an attempt to explore the determinants of technology adoption in Sialkot gloves industry of Pakistan. In this paper, we will map the gloves’ production process and calculate differences in productivity across firms with respect to level of technology adoption and firm size. We will then see if the use of different types of technologies across firms in each stage of the production process can explain productivity differences across firms. We will calculate the total factor productivity, total revenue productivity and labor productivity. The productivity calculations will help to make a cross comparison between small, medium and large enterprises on the basis of technical change, firm size and export destinations. Moreover, in order to estimate the correlates of technology adoption, we estimated an ordered Logit model of technology adoption. The result shows positive and significant impact of retained earnings and firm profitability on technology adoption. Furthermore, technology adoption also positively impacts firm level productivity.
