TY - JOUR
T1 - Allocation of resources within subgroups of an industry
T2 - a case study in the Chinese industrial sector
AU - Tsang, Chun-kei
AU - Li, Sung-ko
N1 - Publisher Copyright:
© 2019, Springer Science+Business Media, LLC, part of Springer Nature.
Copyright:
Copyright 2020 Elsevier B.V., All rights reserved.
PY - 2020/2/1
Y1 - 2020/2/1
N2 - Facing bottlenecks of economic growth, two important policy concerns of the Chinese government are the regional fragmentation and ownership distortion. This paper extends the method of measuring structural efficiency of a group of firms to the existence of subgroups of firms to evaluate such issue. Without knowing the “true” prices, we argue that there is an output-oriented solution to the economy. We then apply this new method to the Chinese industrial sector from 2005 to 2014 as a case study. We found that resources were allocated efficiently among different regions but not within regions. In contrast, resources were allocated efficiently within different ownerships but not among ownerships. Specifically, by eliminating inefficient resource allocation among different ownerships, outputs of the whole industrial sector could be increased by 21% of the observed levels. These two findings cannot be derived directly from other existing methods. Our results advocate different directions to conduct further regional and ownership reforms in China.
AB - Facing bottlenecks of economic growth, two important policy concerns of the Chinese government are the regional fragmentation and ownership distortion. This paper extends the method of measuring structural efficiency of a group of firms to the existence of subgroups of firms to evaluate such issue. Without knowing the “true” prices, we argue that there is an output-oriented solution to the economy. We then apply this new method to the Chinese industrial sector from 2005 to 2014 as a case study. We found that resources were allocated efficiently among different regions but not within regions. In contrast, resources were allocated efficiently within different ownerships but not among ownerships. Specifically, by eliminating inefficient resource allocation among different ownerships, outputs of the whole industrial sector could be increased by 21% of the observed levels. These two findings cannot be derived directly from other existing methods. Our results advocate different directions to conduct further regional and ownership reforms in China.
KW - Chinese industrial sector
KW - Output-oriented structural efficiency
KW - Ownership reform
KW - Revenue structural efficiency
KW - Western development strategy
UR - http://www.scopus.com/inward/record.url?scp=85075199172&partnerID=8YFLogxK
U2 - 10.1007/s11123-019-00563-8
DO - 10.1007/s11123-019-00563-8
M3 - Journal article
AN - SCOPUS:85075199172
SN - 0895-562X
VL - 53
SP - 125
EP - 139
JO - Journal of Productivity Analysis
JF - Journal of Productivity Analysis
IS - 1
ER -