A metafrontier and Malmquist productivity index approach for analyzing biased technological and efficiency change in Taiwanese traditional Chinese medicine

Abstract

This study assesses changes in resource productivity in traditional Chinese medicine (TCM) system across Taiwanese counties and cities from 2016 to 2019, stratifying the analysis by population densities. Employing a data envelopment analysis (DEA) metafrontier Malmquist productivity index model, this research relaxes Hicks' neutrality assumption of technical change, allowing for the measurement of biased technological change and technical gap ratio changes. The empirical findings reveal a decline in TCM system productivity, primarily attributed to reduced technological advancements. Notably, higher productivity changes were observed in counties and cities with lower population densities, contrasting with those having higher population densities, where productivity changes were limited. The results suggest that areas with lower population densities hold significant potential for technological enhancement, as evidenced by intergroup technology updates and technological leadership indices. Furthermore, the estimates of productivity change and technological bias underscore the inadequacy of assuming Hicks’ neutral technological change for analyzing TCM system productivity in Taiwan. These findings highlight the need for improved TCM system technology and innovation within the healthcare system to address the urban-rural gap effectively.