Provincial Technology and Productivity Gaps in China Using Meta-Frontier    

 

This article outlines studies that shows changes in productivity and change in productivity gap in three regions of China for 1995 through 2008. With findings that the group technical efficiency and meta-technical efficiency are different from each other, we found very important facts that may give wrong information and distort a reality with both productivity changes. China’s torrid growth has caused imbalance of trade and investments. When it comes to the efficient uses of resources, technical efficiency measures ratio between maximum and article outputs under the given inputs. Since (TFP) total factor productivity was widely used to analyze productivity of each production factor in spite of easy accessibility.   

 Now the Malmquist total factor productivity index can measure technical change. When using the growth accounting method, it is limited and cannot estimate efficiency change, but can measure both TFP and technical change. The stochastic frontier analysis (SFA) was developed almost simultaneously by Meebsen an van den Broeck (MB) (1977) appeared in June [2], and Signer, Lovell, and Schmidt (ALS) (1977) appeared a month later. In the study it shows that there was some weakness of the stochastic frontier model. (Forsund, Lovell, and Schmidt (1980; 14). The Chinese concept of the meta-frontier productivity was analyzed to observe the technical efficiency technical gap, productivity and productivity gap. In (2002) Battese and Rao introduced stochastic frontier analysis (DEA) separately. By using the meta-frontier finding China should that labor and it fertilizer plays an essential role in output. Chinese regional productivity study differs from the existing ones, meaning the meta-frontier model based on DEA was adopted.  Even though under group frontier, the technical efficiency was less under the FDIS, which showed technology gap, particularly in the western region. This concludes that by utilizing its own advantages such as abundant natural endowment and low labor is still important to contribute to its efficiency. When ignored the variation could mislead policy implications.

 

Work CitedW. Meerisen and J. Van den Broeck., “Efficiency Estimation from Cobb-Douglas Production Functions with Composed Error” International Economic Ravion, Vol. 18, No.2, 1977, pp. 435-444. Doi:10.2307/2525757