Open Access Subscription Access
Open Access Subscription Access
Cost Efficiency of Listed Electronics- Information Firms in China
This research studies twenty listed electronics-information firms in China during the period 2001 to 2005 and applies Battese and Coellis (1995) model of a stochastic frontier function to compute the cost inefficiency scores. Simultaneously it also evaluates the influence on cost efficiency of R&D expenditure, scale and management model of the firms. All nominal variables in monetary units have been deflated into real variables at 2001 prices. Our empirical results are summarized as follows: The average cost efficiency of Chinese listed electronics-information firms is very low. R&D expenditure significantly improves cost efficiency. The scale of a firm significantly worsens cost efficiency, showing dis-economies of scale. Operational diversification significantly improves cost efficiency, showing economies of scope.
Electronics-information, Cost Efficiency, Operational Diversification
- Aigner, D., Lovell, K. and Schmidt, P. (1977), Formulation and Estimation of Stochastic Frontier Production Function Models, Journal of Econometrics, 6: 21-37.
- Altunbas, Y., Liu, M. H., Molyneux, P. and Seth, R. (2000), Efficiency and Risk in Japanese Banking, Journal of Banking and Finance, 24: 1605-1628.
- Battese, G. E. and Coelli, T. J. (1995), A Model for Technical Inefficiency Effects in a Stochastic Frontier Production Function for Panel Data, Empirical Economics, 20: 325-332.
- Blonigen, B. A. and Taylor, C. T. (2000), R&D Intensity and Acquisitions in High-technology Industries: Evidence from the US Electronic and Electrical Equipment Industries, Journal of Industrial Economics, 48: 47-70.
- Farrell, M. J. (1957), The Measurement of Productive Efficiency, Journal of the Royal Statistical Society, Part A(120): 253-281.
- Fillippini, M. (1998), Are Municipal Electricity Distribution Utilities Natural Monopolies?, Annals of Public and Cooperative Economics, 69: 157-174.
- Filippini, M. and Wild, J. (2001), Regional Difference in Electricity Distribution Costs and the Consequences for Yardstick Regulation of Access Prices, Energy Economics, 23: 47-68.
- Hu, J. L. and Hsu, Y. H. (2007), Effects of Chinas Communication Industry Policy on Domestic Cellphone Manufacturers, Technology in Society, 29: 483-489.
- Hu, J. L., Su, Y. Y. and Chen, C. P. (2008), Efficiency of Nationwide Banks in China, Journal of American Academy of Business, 13(2): 84-90.
- Khumbhakar, S. C., Ghosh, S. and McGukin, J. (1991), A Generalized Production Frontier Approach for Estimating Determinants of Inefficiency in US Dairy Farms, Journal of Business and Economic Statistics, 9: 279-286, 1991.
- Kopp, R. J. and Diewert, W. E. (1982), The Decomposition of Frontier Cost Function Deviations into Measures of Technical and Allocative Efficiency, Journal of Econometrics, 19: 319-331.
- Ministry of Information Industry (MII) of Peoples Republic of China, from http://www.mii.gov.cn/.
- Schmidt, P. and Lovell, C. A. K. (1979), Estimating Technical and Allocative Inefficiency Relative to Stochastic Production and Cost Functions, Journal of Econometrics, 9: 343-366.
- Tan, L.T. and Hwang, A. R. (2002), Imported Technology and R&D in the Taiwanese Electronic Industry, Review of Development Economics, 6: 77-90.
- Tsai, K. H. and Wang, J. C. (2004), The R&D Performance in Taiwans Electronics Industry: A Longitudinal Examination, R&D Management, 34: 161-172.
Abstract Views: 85
PDF Views: 1