The Relationships between Ownership and Productivity, and Efficiency –A Research on China?s Automobile Industry
Date Issued
2011
Date
2011
Author(s)
Cheng, Jyun-Wei
Abstract
In recent years China has become the largest consumption market as well as the greatest manufacturing factory in the global automobile industry. The output value of automobile industry has also rose to 4.29% of total output values of China in 2009. The development of automobile industry is therefore of considerable importance for China’s economic growth. Since early 1980s, Chinese government has encouraged local and foreign firms to set up joint ventures to access new production technology and management skills. Apart from these pro-cooperation policies, government has also provided great financial support for in-house R&D activities of local automobile firms, especially after China’s entering WTO in 2001.
Does this indicate that the ownership advantages in production no longer exist? Based on the firm-level data set collected by NBS over the period from 2001 to 2007, this paper aims to explore the relationship between ownership and productivity as well as the connection between ownership and efficiency. Labor productivity and total factor productivity are employed to measure firm productivity. What’s more, we adopt the stochastic frontier approach to access company efficiency. The empirical results show that firms with at least partial foreign ownership tend to perform better both in productivity and efficiency. In addition, we also observe an increasing trend in average technical efficiency, from 29.63% in 2001 to 46.13% in 2007. At last, the average labor productivity is the highest in Zhujiang Delta, while the average value of total factor productivity and technical efficiency are the highest in Yangtze River Delta.
Subjects
ownership advantage
productivity
stochastic frontier approach
technical efficiency
SDGs
Type
thesis
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