Abstract
The manufacturing level directly manifests the comprehensive strength of a country or region. Production efficiency provides an important metric of the competitiveness of the manufacturing industry. Based on the data of China’s industrial enterprises of 1999–2011, this paper estimates the production efficiency of manufacturing in Central China’s Hubei Province through stochastic frontier analysis (SFA) and thus characterizes the differences between prefectures of Hubei in manufacturing competitiveness. The results show that, on the prefecture level, Xianning and Wuhan saw a decline in manufacturing competitiveness, while Xiangfan and Xiaogan witnessed an increase in manufacturing competitiveness. To enhance local manufacturing competitiveness and make Hubei the forerunner and cornerstone of Central China, different prefectures should adopt different industrial promotion policies, pay attention to cultivating the technological innovation capabilities of enterprises, and strengthen the integration of production, education, and research.
Highlights
In the meantime, China has entered a new stage of economic development
Made in China 2025. erefore, it is of great significance to correctly estimate and evaluate the manufacturing competitiveness of Hubei. e relevant results help to improve the manufacturing competitiveness of the province and even across Central China, promote high-end brands that are made in China across the globe, and contribute to the sustainable development of trade and economy in the country
E production efficiency of manufacturing enterprises in Hubei was estimated in four steps: first, select and analyze the relevant variables of the production function; second, estimate and test the parameters of the stochastic frontier analysis (SFA) model based on the data of industrial enterprises in Hubei 1999–2011; third, estimate the production efficiency of each enterprise in the 17 prefectures and calculate the annual mean production efficiency in each prefecture; fourth, compare the manufacturing competitiveness between the 17 prefectures, with the annual mean production efficiency as the metric and draw the basic conclusions
Summary
Output (lg1911) Number of employees (lg2515) Fixed assets (lg2123) Human capital (lg2416). Data source: China Industrial Enterprise Database (1999–2011). Notes: there were huge differences between the observations of the above variables, a sign of many missing values. The observations with lots of missing values were removed before analysis. Lg2515 lg2123 lg2416 _cons lnsig2v _cons lnsig2u _cons lnsigma2_cons (1) Cross-section stochastic frontier. N Annual dummy (control) variable Industrial dummy (control) variable t statistics in parentheses: ∗p < .1, ∗∗p < 0.05, and ∗∗∗P < 0.01
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