Financial Efficiency and Long-Term Sustainability of The Coir Industry in Kerala: Evidence from Alappuzha District

The long-term viability of Kerala’s coir industry depends on the ability of enterprises to improve productive efficiency while addressing economic, environmental, and social sustainability requirements. This study develops an integrated enterprise-level framework to assess technical efficiency and long-term sustainability among coir enterprises in Alappuzha district, Kerala. Primary data were obtained from 320 coir enterprises representing traditional, low-mechanised, medium-mechanised, and highly mechanised units. Data Envelopment Analysis (DEA) was applied under Constant Returns to Scale (CRS) and Variable Returns to Scale (VRS) assumptions to estimate relative technical efficiency and scale efficiency. A composite Long-Term Sustainability (LTS) index was constructed from economic, environmental, and social dimensions. Fractional-response regression was then used to examine the conditional associations between selected enterprise characteristics and VRS technical efficiency and LTS. The results show a mean CRS technical-efficiency score of 0.764 and a mean VRS technical-efficiency score of 0.833, while mean scale efficiency was 0.915. The mean LTS score was 0.848, with social sustainability recording the highest mean dimension score (0.904) and environmentalsustainability the lowest (0.783). The fractional-response analysis indicates that none of the examined enterprise characteristics was statistically significant in the VRS-efficiency model. In contrast, product diversification, access to finance, circularpractices, and managerial capability were positively associated with LTS, whereas mechanisation level showed a small negative conditional association. These findings indicate that productive efficiency and sustainability represent complementary but distinct dimensions of enterprise performance. The study contributes an integrated empirical framework for understanding coir-enterprise performance and provides evidence relevant to policies supporting resource efficiency, enterprise capability, technological adaptation, and inclusive long-term development in Kerala’s coir-producing regions.