Empirical Study On X-Efficiency Of China's Car Industry

The automobile industry is one of China's pillar industries, which is more and more important in the national economy. According to the development trend in recent years, the largest proportion of sales volume and growing fastest was car industry. The development of China's car industry was effected by the domestic and international economic environment, social environment, industry environment, consumer environment and technological level of production, management ability, etc, it also faced with the competition of global and domestic market pressures. After losing the transitional policy protect of joining WTO, how to strengthen the management of China's car industry, enhance the technical level, brands and core competitiveness of independent car enterprise had become a critical issues of China's car industry. This thesis carried on the efficiency research of China's car industry based on the above background by taking China's major car manufacturers as the experimental objects.The author constructed some factors affected x-efficiency of China's car Industry from six aspects such as industry background, industrial scale, industry management, market competitiveness, profitability and innovation, etc. To study the internal mechanism of these factors affecting X-efficiency, the author constructed analysis model based on DEMATEL method. And analyzed the affecting direction and extent of from combined effects degree, cause degree and centrality degree after identifying affect factors by analysis model constructed before.The results shown that some indicators such as the policies, brand values, culture and ideas, the proportion of independent brands, etc, effected the X-efficiency of domestic car industry positive. Some indicators such as policies, economic situation, the proportion of parts localization, brand value and other indicators were causal factors in the efficiency affect index system, while other indicators were result factors. Fair development degree of inter-enterprise, culture&ideas, and related policies that effected the index system and other indicators in a central position. Centrality degree of industry standard's complete extent level was minimum in all the index, which shows that China's car industry has not sufficiently standardized by far, and the industry standard has not played its due role.After review and analysis of stochastic frontier analysis (SFA) theory, the author constructed Cobb-Douglas production function and Translog production function to measure X-efficiency of China's car industry. In the empirical study of X-efficiency, the author constructed input-output index system. Where, input index conclude end total assets, annual investment and number of employment, output index conclude total profits and taxes. The results shown that all regression coefficients were significant in T-test, the sample car companies existed inefficiencies and SFA was suitable to measure X-efficiency. More than eighty percent errors was caused by inefficiency while less than twenty percent was caused by random error. According to the results of SFA, the joint venture car enterprises exhibited the higher technical efficiency, state-owned enterprises and private enterprise exhibited lower technical efficiency because of China's car industry started relatively late, and existed large gap in all aspects with foreign-funded enterprises. The efficiency value of each typical car enterprise was not obvious fluctuations in the 2003-2008 year, and did not showed the overall trend of annual increase or decrease. With the change of technical level, management level and market competition, the relative gap among enterprises was gradually narrowed, i.e. the difference in the ability of using existing resources or opportunities caused by the inter reason of car enterprises was reduced year by year, which shown that the diversified pattern of competition has preliminarily formed.After review and analysis of Data Envelopment Analysis (DEA) theory, the author constructed three-stage DEA model to measure X-efficiency of China's car industry. The efficiency results of first stage was different from actual situation of China's car industry, so we need to carry on analysis of second stage,i.e. considering the effect of environment variables and decomposied the effect of random errors and management invalid. In the process of second stage, the author regression analyzed all the slack variables of input and adjusted initial input variables according to regression results. In the third stage, the author calculated X-efficiency using adjusted input and initial output. The results of three-stage DEA showed that the whole technical level and management level of China's car industry rised year by year, and the overall scale of car industry was continuous optimization in the past few years. Relative to the virtual decision making unit, China's car industry has big upgrade potential in terms of efficiency, so there was a great waste of resources in the past due to inefficiency caused by the car industry's management. In recent years, China's own car companies improved significantly in technology and management, and got significant progress in the effective utilization of resources. Joint venture enterprises were better than autonomous enterprise in scale control and management. Both SFA and three-stage DEA method are suitable in measuring the efficiency of the car industry. The SFA method can weaken the impact of measurement error by considering technical inefficiency and random error, so it can measure the status and changing trend accurately. Beside technical inefficiency and random error, three stage DEA considered the efficiency effect of environmental differences, so the results of three stage DEA are more steady compared to SFA. So, the measuring results of three-stage DEA method are more precise compared to SFA.The growing background China's car industry is very complex. With development and growth of car industry, diversity competitive situation become increasingly evident. As to the market competition, competition in car industry has become increasingly complex with the improvement of efficiency and car production. The advantages of traditional car manufacturers reduced constantly, and the advantage of emerging enterprises increased gradually. The car manufacturer's market share tends to balance as the improvement of efficiency. As to the car price, the growth of car supply has been faster than demand growth with the upgrade of production efficiency and production scale. The improvement of production efficiency caused more and more car enterprises optimized their production scale and reduce their production cost. In this case, the reduce of car price become possible with the increase of car demand. In order to improve the management efficiency of car enterprises, we need to correctly cognitive the factors which effected the efficiency of car enterprises, perfect the efficiency management mechanism and enrich the talent pool of efficient management constantly.