Abstract

Background: This article takes a look at the technical efficiency of 53 A-share listed companies of Chinese military industrial enterprises in the ‘10 Major Military-industrial Groups’ based on the random Frontier B95 model and the panel data of listed companies from 2010 to 2015. Objectives: The research put forward five influencing factors, namely ownership structure, asset turnover, enterprise size, staff education and regional differences. Method: The article proposed five hypotheses to measure the technical efficiency of the military and civilian enterprises. Results: The results showed a gradual increase in the technical efficiency of sampled military industrial enterprises, even though the overall results were low with a decreasing scale income. There was a positive correlation between ownership concentration and the technical efficiency of military industrial enterprises, but not significant. However, the proportion of state-owned large shareholders and the technical efficiency of military industrial enterprises had a negative correlation and were not significant. Asset turnover ratio, firm size, employee education level and regional differences correlated positively with the technical efficiency of military industrial enterprises, and their influence was seen to be very important. Conclusion: The conclusion of the study provides an empirical basis for further studies enhancing the technical efficiency of military industrial enterprises in China.

Highlights

  • Military industrial enterprises bear the most important tasks of national defence, scientific research and production, and are engaged in providing various types of weapons and equipment to state armed forces for their research and production

  • The results showed that technology spillovers, government subsidies and militarylisted company’s Research and Development (R&D) output were significantly negatively correlated

  • From the perspective of the dynamic development of the technical efficiency of military industrial enterprises, the average value of technical efficiency in 2010–2015 has been on an upward trend, with a marked increase in 2015, indicating a slightly lower technical efficiency of military industrial enterprises over time

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Summary

Introduction

Military industrial enterprises bear the most important tasks of national defence, scientific research and production, and are engaged in providing various types of weapons and equipment to state armed forces for their research and production. The development of military industrial enterprises may directly affect the national security. From the ‘Universe Brand’ weapons (weapons made by various countries) of the first parade after the founding of New China (Peoples Republic of China) to the ‘Made in China’ at the Tribute of 70th Centenary of the Conquest of Chinese People’s Battle against Japanese Assault and the World Anti-Nazi Conflict, we can see that the military industrial enterprises in China have undergone tremendous changes. With the development of the military–civilian integration strategy, the ‘10 Major Military-industrial Groups’ established in 1999 has become a distinctive military–civilian integration industry. This article takes a look at the technical efficiency of 53 A-share listed companies of Chinese military industrial enterprises in the ‘10 Major Military-industrial Groups’ based on the random Frontier B95 model and the panel data of listed companies from 2010 to 2015

Objectives
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Conclusion

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