R&D efficiency and productivity growth: A malmquist index analysis of High-Tech industries in China

Abstract

R&D (Research and Development) has been widely regarded as the major driving factor to promote the development of High-Tech industries. With the development of High-Tech industries for more than ten years, efficiency and productivity of R&D have become a critical issue in China. Accordingly, the main purpose of this paper is to evaluate R&D efficiency and productivity growth of 16 High-Tech industries in China for a period of 2002 to 2007. Data Envelopment Analysis (DEA) as a non-parametric method is used to analyze the comparative performance of these High-Tech industries in relation to R&D. Furthermore, Malmquist index is used to examine technical efficiency change decomposed into pure technical efficiency change and scale efficiency change, technical change and total factor productivity (TFP) change for these High-Tech industries. The results show that the R&D efficiency is at a relative low level in Chinese High-Tech industries as well as productivity growth. Consequently, this investigation provides some implications for researchers and decision makers. In the end, the limitation of this study is also discussed and areas that require further work are presented.