IDEAS home Printed from https://ideas.repec.org/a/eee/matcom/v68y2005i5p474-483.html
   My bibliography  Save this article

Estimation of Chinese agricultural production efficiencies with panel data

Author

Listed:
  • Hu, Baiding
  • McAleer, Michael

Abstract

Fast and steady economic growth in China during the 1990s attracted much international attention. Given the scarcity of resources, it is important for economic growth to depend on production efficiency improvement to achieve sustainability. As China is the world's second largest foreign capital recipient, foreign capital plays an important role in investment. If economic growth is fuelled by investment, an exodus or a shortage of foreign capital will render growth unsustainable. However, if growth is propelled by improvements in production efficiency, it is more likely to be sustained and to withstand reduction in production input. This paper estimates production efficiency in the agricultural sector in China with a panel data set comprising 30 provinces for the 7-year period, 1991–1997. A panel data model based on the Cobb–Douglas production function is used to represent the production frontier and to compute technical efficiency at the provincial level. Individual effects are tested to determine if pooled estimation is preferred to unpooled (panel) estimation. The test confirms significant differences between the provinces, and hence warrants panel data estimation. Both fixed and random effects models are estimated, with provincial technical inefficiency specified as province-specific intercept terms for the former, and regression disturbances for the latter. Although the random effects model is rejected in favour of the fixed effects model, the latter did not produce estimates with correct signs, and is rejected on economic grounds. Using the random effects model, production efficiency has increased for most provinces, but the gap between the affluent coastal region and the hinterland in the west has increased.

Suggested Citation

  • Hu, Baiding & McAleer, Michael, 2005. "Estimation of Chinese agricultural production efficiencies with panel data," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 68(5), pages 474-483.
  • Handle: RePEc:eee:matcom:v:68:y:2005:i:5:p:474-483
    DOI: 10.1016/j.matcom.2005.02.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0378475405000327
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Carter Colin A. & Zhang Bin, 1994. "Agricultural Efficiency Gains in Centrally Planned Economies," Journal of Comparative Economics, Elsevier, vol. 18(3), pages 314-328, June.
    2. Fare,Rolf & Grosskopf,Shawna & Lovell,C. A. Knox, 2008. "Production Frontiers," Cambridge Books, Cambridge University Press, number 9780521072069, April.
    3. Zhang, Yaoqi, 2002. "The impacts of economic reform on the efficiency of silviculture: a non-parametric approach," Environment and Development Economics, Cambridge University Press, vol. 7(01), pages 107-122, February.
    4. Mao, Weining & Koo, Won W., 1997. "Productivity growth, technological progress, and efficiency change in chinese agriculture after rural economic reforms: A DEA approach," China Economic Review, Elsevier, vol. 8(2), pages 157-174.
    5. Yao, Shujie & Liu, Zinan & Zhang, Zongyi, 2001. "Spatial Differences of Grain Production Efficiency in China, 1987-1992," Economic Change and Restructuring, Springer, vol. 34(1-2), pages 139-157.
    6. Li, Hongbin & Rozelle, Scott, 2000. "Saving or stripping rural industry: an analysis of privatization and efficiency in China," Agricultural Economics, Blackwell, vol. 23(3), pages 241-252, September.
    7. Cornwell, Christopher & Schmidt, Peter & Sickles, Robin C., 1990. "Production frontiers with cross-sectional and time-series variation in efficiency levels," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 185-200.
    8. K.P. Kalirajan & M.B. Obwona & S. Zhao, 1996. "A Decomposition of Total Factor Productivity Growth: The Case of Chinese Agricultural Growth before and after Reforms," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(2), pages 331-338.
    9. Li, Hongbin & Rozelle, Scott, 2000. "Saving or stripping rural industry: an analysis of privatization and efficiency in China," Agricultural Economics of Agricultural Economists, International Association of Agricultural Economists, vol. 23(3), September.
    10. W, Y, 1995. "Productivity Growth, Technological Progress, and Technical Efficiency Change in China: A Three-Sector Analysis1," Journal of Comparative Economics, Elsevier, vol. 21(2), pages 207-229, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kui-Wai Li & Tung Liu & Lihong Yun, 2007. "Technology Progress, Efficiency, and Scale of Economy in Post-reform China," Working Papers 200701, Ball State University, Department of Economics, revised Apr 2007.
    2. Li, Kui-Wai & Liu, Tung, 2011. "Economic and productivity growth decomposition: An application to post-reform China," Economic Modelling, Elsevier, vol. 28(1-2), pages 366-373, January.
    3. repec:unu:wpaper:wp2012-74 is not listed on IDEAS
    4. Zhou, Xianbo & Li, Kui-Wai & Li, Qin, 2011. "An analysis on technical efficiency in post-reform China," China Economic Review, Elsevier, vol. 22(3), pages 357-372, September.
    5. He, Jingjing & Huang, Yongfu, 2012. "The Decarbonization of China's Agriculture," WIDER Working Paper Series 074, World Institute for Development Economic Research (UNU-WIDER).
    6. Akbar, Muhammad & Jamil, Faisal, 2012. "Monetary and fiscal policies' effect on agricultural growth: GMM estimation and simulation analysis," Economic Modelling, Elsevier, vol. 29(5), pages 1909-1920.
    7. Kui-Wai Li & Tung Liu & Lihong Yun, 2008. "Decomposition of Economic and Productivity Growth in Post-reform China," Working Papers 200806, Ball State University, Department of Economics, revised Dec 2008.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:matcom:v:68:y:2005:i:5:p:474-483. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu). General contact details of provider: http://www.journals.elsevier.com/mathematics-and-computers-in-simulation/ .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.