Efficiency differences among China's resource-based cities and their determinants

Abstract

Based on the 2012 data from 116 resource-based cities in China, this paper measures efficiency in resource-based cities by using the super-SBM model, analyzes the differences in efficiency levels among cities, and finds their major determinants. It also examines if the effects of the determinants on efficiency vary at different efficiency-levels by using quantile regression. The four major findings of this study are as follows. First, most of the resource-based cities in China are total factor energy (TFE) inefficient. Second, the level of industrialization, the contribution of service industry to local GDP, and the size of built districts in the city are the three major determinants with significantly positive effect on efficiency. On the other hand, consumer spending, the local government expenditure, and the availability of vocational schools are the three major determinants with significantly negative effect on efficiency. Third, the six determining factors account for 79% of the efficiency differences among the cities. However, the contributions of the factors to TFE efficiency vary widely. Fourth, the effects of the determinants on TFE efficiency change with the efficiency-level of the city.