Abstract
This research applies Data Envelopment Analysis (DEA) approach to analyse Total Factor Productivity (TFP) and efficiency changes in Vietnam coal mining industry from 2007 to 2013. The Malmquist productivity measures were decomposed into two components: technical change index and efficiency change index. The results indicate that TFP of Vietnam coal mining firms decreased due to slow technological progress and unimproved efficiency. The decadence of technical efficiency in many firms proved that the coal mining industry has a large potential to increase productivity through technical efficiency improvement. Enhancing human resource training, technology and research & development investment could help the industry to improve efficiency and productivity in Vietnam coal mining industry. Keywords: Technical and Scale Efficiency, Total Factor Productivity, Nonparametric Techniques, Vietnam. JEL Code : O47, O50 DOI : 10.7176/EJBM/11-12-16 Publication date : April 30 th 2019
Highlights
Total merchandise coal production in the 20 years was 525 million tons, of which the highest yearly production is 44.7 million tons in 2011, equalling 7.5 times of that in 1995 when the monopoly State Owned Vietnam Coal Corporation was established
Overall labour productivity in 2011 was 4 times that in 2011
After 2011, labour productivity not increased because of several reasons: proportion of coal exploited by mine tunnel technology has been increasingly raised, from 2011 to 2015 proportion of tunnel coal increased from 45% to 56%; production output has been constrained by market, while some steps in mining process must be maintained to preserve mine tunnels; gravelly soil volume that needs to be removed in open-cast mine has increased because mines have been increasingly deeper, investment in mechanization has been limited, investment projects has been late in progress, etc
Summary
Total merchandise coal production in the 20 years was 525 million tons, of which the highest yearly production is 44.7 million tons in 2011, equalling 7.5 times of that in 1995 when the monopoly State Owned Vietnam Coal Corporation was established. Prior studies suggested that institution changes are an essential cause of the increase in productivity of coal mining industry in the reform period. In these studies, effects of technological changes were either ignored or considered as insignificant. Most of the studies on coal mining industry productivity followed the traditional parameter approach to calculate TFP by estimating an aggregate production function, a cost function, or a profit function. Large coal mining firms listed in Enterprise survey from 2000-2014 were sampled in the research These firms are members of Vietnam National Coal-Mineral under State owned monopoly. The research only analyzes TFP, technology and efficiency changes in coal mining in Vietnam from Asian financial crisis in 2007. Besides nonparametric method mentioned above, there exists stochastic frontier production function method to decompose TFP change into changes in technological progress and efficiency
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