Abstract
This study measures and compares Chinese and Japanese production efficiency and profitability efficiency of listed companies in household appliance industry by SFA from 2001 through 2005. It also tests the linkage between production efficiency and profitability efficiency in the industry and estimates the impacts of such factors as R&D, advertising and promotion. These estimations indicate that both R&D and advertising and promotion pose significant and positive impacts on firm’s production and profitability efficiency in the long-run. Moreover, R&D expenditure impacts firm’s efficiencies more effectively than advertising and promotion in our sample.
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