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International Journal of Contemporary Business Studies Vol: 4, No: 6 JUNE, 2013 ISSN 2156-7506 Available online at http://w w w.akpinsight.webs.com (Constant), .362 tfp_y a 0.131 0.131 2.0071 a. Dependent Variable: g_m where y = ouput, l_p = per worker productivity of labor, k_p =capital productivity, ph_p = per hour productivity of labor, lk_p = labor & capital productivity, tfp_tr = total factor productivity based on total revenue and tfp_y = total factor productivity based on output. Summary of coefficients for separate regressions is presented in ( Table 14). The coefficients and t-ratios of output, labor productivity, capital productivity, per hour productivity and labor & capital productivity have been found as 0.943, 0.855, 0.235, 0.619 & 0.602 and 147.329, 52.29, 12.35, 35.55, & 32.20 respectively. According to the results, an increase in output and labor productivity will cause greater increase in the profitability as compared to other measures of productivity. However, all the measures of productivity have emerged as having positive and significant impact on profitability. Further, measures of TFP based on revenue as well as output have emerged as significant because both have high values of t-ratio stands at 30.48 and 27.95 respectively. Results in the form of positive elasticity’s also suggest that an increase in TFP will also lead to an increase in profitability (Table 14). Page | 29 Table 14 Summary of Coefficients for Separate Regressions Predictors Unstandardized Coefficients Standardized Coefficients t Sig. Std. B Beta Error (Constant) -0.99 0.072 -13.709 0 y 0.943 0.006 0.899 147.329 0 (Constant) 3.199 0.122 26.123 0 l_p 0.855 0.016 0.588 52.291 0 (Constant) 9.115 0.041 219.886 0 k_p 0.235 0.019 0.169 12.35 0 (Constant) 9.813 0.028 344.755 0 ph_p 0.619 0.017 0.443 35.547 0 (Constant) 9.939 0.031 321.843 0 lk_p 0.602 0.019 0.408 32.197 0 (Constant) 7.551 0.069 109.62 0 tfp_tr 1.576 0.052 0.39 30.481 0 (Constant) 7.839 0.065 120.92 0 tfp_y 1.331 0.048 0.362 27.95 0 a. Dependent Variable: g_m C opyright © 2 0 13. A cademy of Knowledge P rocess
International Journal of Contemporary Business Studies Vol: 4, No: 6 JUNE, 2013 ISSN 2156-7506 Available online at http://w w w.akpinsight.webs.com where y = ouput, l_p = per worker productivity of labor, k_p =capital productivity, ph_p = per hour productivity of labor, lk_p = labor & capital productivity, tfp_tr = total factor productivity based on total revenue and tfp_y = total factor productivity based on output. CONCLUSION AND RECOMMENDATIONS Page | 30 The objective of this study was two fold. Firstly, computation of a variety of measures of productivity including per worker labor productivity, labor productivity per hour worked, capital productivity, combined measure of labor & capital productivity, two measures of total factor productivity based on output as well as on revenue and profitability for the firms operating in the large scale manufacturing industries in Pakistan. Second objective of this study was to establish and analyze the relationship between various measures of productivity and that of the profitability. Census data of manufacturing industries has been used to carry out the firm level analysis disaggregated by form of ownership of the firm, legal and listing status of the firm and by type of major industry. Analysis of the data has been carried out in three stages. In the first stage, averages of the measures of factor inputs like labor, capital, materials and energy as well as of the output measures such as gross output, revenue, productivity and profitability were calculated. In the second stage, correlation analysis was carried out and in the third and final stage regression analysis between profitability and factor inputs as well as between profitability and various measures of productivity was conducted. According to results average output, productivity and profitability for listed companies is greater than the non-listed companies. Foreign controlled firms operating in the large scale manufacturing industries are more efficient in terms of output, productivity and profitability as compared to both private and public sector companies. Public limited companies have been emerges as more efficient and profitable as compared to private limited companies. Firms operating in the industry groups like petroleum and tobacco have been found as more productive, efficient and higher in profitability as compared to firms in other industries. All the four explanatory variables i.e. labor, capital, materials and energy has been found as having a positive and highly significant relationship with profitability. Further, log measures of productivity and total factor productivity have also been emerged as significant predictors of profitability. Data analysis carried out by descriptive, correlation and regression suggest a positive, strong and significant relationship between various measures of productivity and profitability. In sum, the data evidence from large scale manufacturing industries in Pakistan suggests that higher productivity of workers leads to higher profit for the firms. Therefore, firms in these industries should make human capital investment through education, training and development to enhance the productivity of their workers, which in turn will result higher profit for the firms in long run. REFERENCES Ahmed , K.; Chaudry, M. A. & Ilyas, M. (2008). Trends In total factor productivity in Pakistan’s agriculture sector‖, Pakistan Economic and Social Review, Volume 46, No. 2 (Winter 2008), pp. 117-132 C opyright © 2 0 13. A cademy of Knowledge P rocess
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