Production uncertainty and technical inefficiency of textile manufacturing and exporting firms in Pakistan

The textile industry of Pakistan has shown progress not only in production but it has also performed well in export over the last five decades. We estimated technical inefficiency (T.I.E) and production uncertainty (P.U) due to (T.I.E) of Pakistan's textile exporting firms. The data was derived from 99 companies’ annual reports for the year 2008–09. We used stochastic production frontier with half normal distribution of ui and calculated the inefficiencies with confidence intervals. Inefficiencies u_i/ε_i, are statistically significant at 5% level of significance. The mean T.I.E_i is 0.107 and the mean P.U_i is 0.06647.