An Analysis on Technical Efficiency in Post-reform China

Zhou, Xianbo and Li, Kui-Wai and Li, Qin (2010): An Analysis on Technical Efficiency in Post-reform China. Published in: China Economic Review , Vol. 22, (2011): pp. 357-372.

Abstract

This paper employs a fully nonparametric stochastic frontier model with time and individual effects to study technical efficiency in China's post-reform economy. The panel data cover China's thirty provinces for the period of 1985–2008. The empirical results show that the average output elasticity of labor is larger than the other two inputs of capital and human capital. Based on the specified inefficiency Tobit model, the factor analysis on technical efficiency shows that the time effects of technical efficiency in China's post-reform economy are significantly contingent on the factors. There exists significant regional differences in technical efficiency in China's economic development, and a number of policy implications can be drawn.

• Item Type: MPRA Paper
• Language: English
• Keywords: Fully nonparametric stochastic frontier Time effects and individual effects Time variant Technical efficiency Tobit model
• Subjects: C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C51 - Model Construction and Estimation; O - Economic Development, Innovation, Technological Change, and Growth > O4 - Economic Growth and Aggregate Productivity > O47 - Empirical Studies of Economic Growth ; Aggregate Productivity ; Cross-Country Output Convergence; D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity

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