An estimation of the regional disparities in technical efficiency in China: An analysis based on stochastic frontier model

Abstract

On the basis of a number of literatures, a great contribution of regional disparity is technical efficiency, as it were, efficiency improvement is the only factor of narrowing the regional disparities. So we can bring the inefficient situation to the analysis of the regional disparities. This paper estimates the provincial technical efficiency in China based on the panel data of 30 provinces during the period 1996–2010 with stochastic frontier analysis. The results show that the technical efficiency levels have been continuously in decline, and the regional disparities are obvious. The range of 30 provinces surpasses 30%,which is over 20% in eight economic zones. The rate of decline for the regions of higher technical efficiency is slower than the lower ones. That means the regional disparities are enlarging.