Provincial Technology and Productivity Gaps in China Using Meta-Frontier

DOI: 10.4236/me.2013.48059   PDF   HTML   XML   3,766 Downloads   5,587 Views   Citations

Abstract

This study intends to analyze not only technical efficiency and technology gap but also productivity change and productivity gap in thirty one provinces in three regions of China for 1995 through 2008 adapting meta-frontier model. Also, we decompose the productivity into technical progress change and technical efficiency change in order to check a main component to the changes. We found that the group technical efficiency (or productivity) and meta-technical efficiency (or productivity) of provinces are different from each other. With respect to the meta-frontier, the eastern region shows the highest levels in terms of productivity as well as technical efficiency. Regarding the meta-productivity change, the productivity declines in the central and western regions have been mainly led by the drop on the efficiency change while the productivity growth in the eastern region has been driven by the technical progress. Lastly, by applying the meta-frontier, we found a very important fact that there exists a difference between the group-frontiers and the meta-frontiers, which implies that we may give wrong information and distort a reality with the group-frontier when measuring the technical efficiencies or productivity changes.

Share and Cite:

K. Sang-Mok, K. Moon-Hwee and P. Hui-Lan, "Provincial Technology and Productivity Gaps in China Using Meta-Frontier," Modern Economy, Vol. 4 No. 8, 2013, pp. 556-567. doi: 10.4236/me.2013.48059.

Conflicts of Interest

The authors declare no conflicts of interest.

References

[1] http://www.worldbank.org/
[2] W. Meeusen and J. Van den Broeck, “Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error,” International Economic Review, Vol. 18, No. 2, 1977, pp. 435-444. doi:10.2307/2525757
[3] D. J. Aigner, C. A. K. Lovell and P. Schmidt, “Formulation and Estimation of Stochastic Frontier Production Function Models,” Journal of Econometrics, Vol. 6, No. 1, 1977, pp. 21-37. doi:10.1016/0304-4076(77)90052-5
[4] F. R. Forsund, C. A. K. Lovell and P. Schmidt, “A survey of Frontier Production Functions and of their Relationship to Efficiency Measurement,” Journal of Econometrics, Vol. 13, No. 1, 1980, pp. 5-25. doi:10.1016/0304-4076(80)90040-8
[5] J. Jondrow, C. A. K. Lovell, I. S. Materov and P. Schmidt, “On the Estimation of Technical Inefficiency in the Stochastic Frontier Production Function Model,” Journal of Econometrics, Vol. 19, No. 2, 1982, pp. 233-238. doi:10.1016/0304-4076(82)90004-5
[6] S. C. Kumbhakar and C. A. K. Lovell, “Stochastic Frontier Analysis,” Cambridge University Press, Cambridge, 2003.
[7] M. M. Pitt and L. F. Lee, “The Measurement and Sources of Technical Inefficiency of Indonesian Weaving Industry,” Journal of Development of Economics, Vol. 9, No. 1, 1981, pp. 43-64. doi:10.1016/0304-3878(81)90004-3
[8] C. Cornwell, P. Schmidt and R. C. Sickles, “Production Frontiers with Coss-Sectional and Time-Series Variation in Efficiency Levels,” Journal of Econometrics, Vol. 46, No. 2, 1990, pp.185-200. doi:10.1016/0304-4076(90)90054-W
[9] G. E. Battese and T. J. Coelli, “Prediction of Firm-Level Technical Efficiencies with a Generalized Frontier Production Function and Panel Data,” Journal of Econometircs, Vol. 38, No. 3, 1988, pp. 387-399. doi:10.1016/0304-4076(88)90053-X
[10] S. E. Atkinson and C. Cornwell, “Parametric Measurement of Technical and Allocative Inefficiency with Panel Data,” International Economic Review, Vol. 35, No. 1, 1994, pp. 231-244. doi:10.2307/2527099
[11] Y. H. Lee and P. Schmidt, “A Production Frontier Model with Flexible Temporal Variation in Technical Efficiency,” In: H. Fried, C. A .K. Lovell and S. Schmidt, Eds., The Measurement of Prodcutive Efficiency; Techniques and Applications, Oxford University Press, Oxford, 1993.
[12] S. C. Kumbhakar, “Production Frontiers, Panel Data, and Time-Varying Technical Inefficiency,” Journal of Economics, Vol. 46, No. 1-2, 1990, pp. 201-211.
[13] G. E. Battese and T. J. Coelli, “Frontier Production Functions, Technical Efficiency and Panel Data: With Application to Paddy Farmers in India,” Journal of Productivity Analysis , Vol. 3, No. 1-2, 1992, pp. 153-169. doi:10.1007/BF00158774
[14] A. Charnes, W. Cooper and E. Rhodes, “Measuring the Efficiency of Decision—Making Units,” Journal of Operational Research, Vol. 2, No. 6, 1978, pp. 429-444. doi:10.1016/0377-2217(78)90138-8
[15] W. D. Cook and Joe Zhu, “Allocation of Shared Costs among Decision Making Units: A DEA Approach,” Computers & Operations Research, Vol. 32, No. 8, 2005, pp. 2171-2178. doi:10.1016/j.cor.2004.02.007
[16] W. D. Cook and M. Kress, “Characterizing an Equitable Allocation of Shared Costs: A DEA Approach,” European Journal of Operational Research, Vol. 119, No. 3, 1998, pp. 652-661. doi:10.1016/S0377-2217(98)00337-3
[17] L. Friedman and Z. Sinuany-Stern, “Combining Ranking Scales and Selecting Variables in the DEA Context: The Case of Industrial Branches,” Computers & Operations Research, Vol. 25. No. 9, 1998, pp. 781-791. doi:10.1016/S0305-0548(97)00102-0
[18] M. Asmild and J. L. Hougaard, “Economic Versus Environmental Improvement Potentials of Danish Pig Farms,” Agricultural Economics, Vol. 35, No. 2, 2006, pp. 171-181. doi:10.1111/j.1574-0862.2006.00150.x
[19] A. Assaf, C. P. Barros and A. Josiassen, “Hotel Efficiency: A bootstrapped metafrontier approach,” International Journal of Hospitality Management, Vol. 29, No. 3, 2010, pp. 468-475. doi:10.1016/j.ijhm.2009.10.020
[20] K. H. Chen, Y. J. Huang and C. H. Yang, “Analysis of Regional Productivity Growth in China: A Generalized Meta-frontier MPI Approach,” China Economic Review, Vol. 20. No. 4, 2009, pp. 777-792. doi:10.1016/j.chieco.2009.05.003
[21] G. E. Battese and D. S. P. Rao, “Technology Gap, Efficiency, and a Stochastic Meta-frontier Function,” International Journal of Business and Economics 1, Vol. 1, No. 2, 2002, pp.87-93.
[22] Y. Hayami, “Sources of Agricultural Productivity Gap among Selected Countries,” American Journal of Agricultural Economics, Vol. 51, No. 3, 1969, pp. 564-575. doi:10.2307/1237909
[23] Y. Hayami, “On the Use of the Cobb-Douglas Production Function on the Cross-Section Analysis of Agricultural Production,” American Journal of Agricultural Economics, Vol. 52, No. 2, 1970, pp. 327-329. doi:10.2307/1237509
[24] Y. Hayami and V. W. Ruttan, “Agricultural Productivity Differences among Countries,” American Economic Review, Vol. 60, No. 5, 1970, pp. 895-911.
[25] Y. Huang and V. W. Ruttan, “Agricultural Development: An International Perspective,” Journal of Development Economics, Vol. 26, No. 1, 1971, pp. 197-200.
[26] M. M. Jemaa and M. A. Dhif., “Agricultural Productivity and Technological Gap between MENA Region and Some European Countries: A Meta-Frontier Approach,” Economic Research Forum, 2005, pp.1-20.
[27] S. Rungsuriyawiboon and X. B. Wang, “Recent Evidence on Agricultural Efficiency and Productivity in China: A Meta-Frontier Approach,” Discussion Paper No. 104, Asian-Pacific Productivity Conference, 2007.
[28] C. J. O’Donnell, D. S. P. Rao and G. E. Battese, “Meta-Frontier Frameworks for Study of Firm-Level Efficiencies and Technology Ratios,” Empirical Economics, Vol. 34, No. 2, 2008, pp. 231-255. doi:10.1007/s00181-007-0119-4
[29] C.-T. Chen, J.-L. Hu and J.-J. Liao, “Tourists’ Nationalities and the Cost Efficiency of International Tourist Hotels in Taiwan,” Africa Journal of Business Management, Vol. 4, No. 16, 2010, pp.3440-3446
[30] S.-M. Kang and S.-k. Jo, “Technical efficiency and Technical Gap of Strategic Industries of Busan Using Metafrontier,” Korean Association of Regional Studies, Vol. 17, 2009, pp.49-73.
[31] K. Denny, C. Harmon and S. Redmond, “Functional Literacy, Educational Attainment and Earnings—Evidence from the International Adult Literacy Survey”, IFS Working Paper W00/09, 2002.
[32] F. Blau and L. Kahn, “Do Cognitive Test Scores Explain Higher US Wage Inequality?” Review of Economics and Statistics, Vol. 87, No. 1, 2005, pp.184-193. doi:10.1162/0034653053327649
[33] K. De Witte, W. Groot and H. M. Van den Brink, “The Efficiency of Education in Generating Literacy: A Stochastic Frontier Approach,” Review of Economics & Finance, Vol.2, No. 2, 2012, pp. 25-37.
[34] P. Khrueathai, A. Untong, M. Kaosa-Ard and R. A. Villano, “Measuring Operation Efficiency of Thai Hotels Industry: Evidence from Meta-frontier Analysis,” Journal of European Economy, Vol. 11, 2012, pp. 202-217.
[35] http://www.stats.gov.cn
[36] http://www.china.org.cn

  
comments powered by Disqus

Copyright © 2020 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.