Study on the influential factors of technical efficiency difference of China's service industry among provinces ----Based on stochastic frontier analysis (Feb 2009)

Abstract

This paper uses stochastic frontier analysis to make empirical study on the influential factors of technical efficiency difference of China's service industry among provinces. We find that the technical efficiency of service industry of every province gets steady increase from 1992 to 2006, but the difference among provinces is great. The development degree of non state-owned economy, foreign direct investment (FDI), the amount of imports and exports, and the region character all influence the technical efficiency of service industry. When the percentage of non state-owned economy in the total economy increases by 1%, the technical efficiency of service industry will increase by 0.6626%. When the percentage of FDI to GDP increases by 1%, the technical efficiency of service industry will increase by 3.5421%. When the amount of imports and exports increases by 1%, the technical efficiency of service industry will increase by 2.350%. Under the situation of equal other condition, the technical efficiency of service industry of the eastern region is higher than that of the middle and western region of China.