Measurement of Factors’ Productivity and Intensity in Tanning Industry of Bangladesh

Abstract

Bangladesh is enjoining a better environment for leather production due to available hides and skins and cheap labor. Leather is highly demanded both for domestic utilization and for export. Economic performance depends on factors (labor and capital) activities in tanning industry. Our results show that marginal products- both of labor and capital are lower than average products. Labor intensities are higher both in wet-blue and crust stages, but low in finished stage. It means that finished stage is capital intensive stage and wet-blue and crust stages are labor intensive. The more efficient firm will have a larger A (efficiency) than the less efficient one. We observe from the results that the production efficiency is increasing and it is in highest position in finished stage. The production efficiency is in the best position in finished stage due to skilled labor involvement in production process.