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Technical Efficiency and Its Determinants in Gansu, West China

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  • Sizhong Sun

    (ANU)

Abstract

This paper analyses the technical efficiency problem in Gansu Province, West China, using firm-level cross-sectional data. Compared with previous studies, which mostly focus on industries, this paper focuses on a geographic area instead. By applying the stochastic frontier framework, this paper arrives at four major findings : first, resource-based firms are more technically efficient on average than non-resource-based firms; second, foreign investment is beneficial to the improvement of technical efficiency; third, there is no evidence that ownership affects the technical efficiency of firms in Gansu province; and fourth, bigger firms tend to operate with more technical efficiency than smaller firms.

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Bibliographic Info

Paper provided by East Asian Bureau of Economic Research in its series Microeconomics Working Papers with number 21834.

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Date of creation: Jan 2006
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Handle: RePEc:eab:microe:21834

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Keywords: stochastic frontier; technical efficiency; China;

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  1. Forsund, Finn R. & Lovell, C. A. Knox & Schmidt, Peter, 1980. "A survey of frontier production functions and of their relationship to efficiency measurement," Journal of Econometrics, Elsevier, vol. 13(1), pages 5-25, May.
  2. Carter, Colin A. & Estrin, Andrew J., 2001. "Market Reforms Versus Structural Reforms in Rural China," Journal of Comparative Economics, Elsevier, vol. 29(3), pages 527-541, September.
  3. Huang, Yiping & Kalirajan, K. P., 1997. "Potential of China's grain production: evidence from the household data," Agricultural Economics, Blackwell, vol. 17(2-3), pages 191-199, December.
  4. Liu, Zinan & Zhuang, Juzhong, 2000. "Determinants of Technical Efficiency in Post-Collective Chinese Agriculture: Evidence from Farm-Level Data," Journal of Comparative Economics, Elsevier, vol. 28(3), pages 545-564, September.
  5. Xu, Xiaosong & Jeffrey, Scott R., 1998. "Efficiency and technical progress in traditional and modern agriculture: evidence from rice production in China," Agricultural Economics, Blackwell, vol. 18(2), pages 157-165, March.
  6. Jefferson, Gary H., 1990. "China's iron and steel industry : Sources of enterprise efficiency and the impact of reform," Journal of Development Economics, Elsevier, vol. 33(2), pages 329-355, October.
  7. Guang Wan & Enjiang Cheng, 2001. "Effects of land fragmentation and returns to scale in the Chinese farming sector," Applied Economics, Taylor and Francis Journals, vol. 33(2), pages 183-194.
  8. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
  9. Bhattacharyya, Arunava & Parker, Elliott, 1999. "Labor productivity and migration in Chinese agriculture A stochastic frontier approach," China Economic Review, Elsevier, vol. 10(1), pages 59-74.
  10. Wang, Jirong & Cramer, Gail L. & Wailes, Eric J., 1996. "Production efficiency of Chinese agriculture: evidence from rural household survey data," Agricultural Economics, Blackwell, vol. 15(1), pages 17-28, September.
  11. Dong, Xiao-yuan & Putterman, Louis, 1997. "Productivity and Organization in China's Rural Industries: A Stochastic Frontier Analysis," Journal of Comparative Economics, Elsevier, vol. 24(2), pages 181-201, April.
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