Based On Cobb - Douglas Production Function Of Suqian Wood Processing Industry Scale Economic Evaluation Research

Since1980’s, wood processing industry of Suqian city which mainly depends on the poplar raw material has achieved a giant change from small to huge, weak to strong, it has become leading and pillar industry which makes breakthrough in Suqian industry. But because of the fast hyper-normal development of wood processing industry in Suqian,"small, loose, mess" such problem due to systems, concept and short-term interest oriented etc. has become serious. Therefore, to enhance the study of scale economy of Suqian’s wood industry, it has very important realistic meaning to promote the influence and sustainable development of Suqian wood processing industry.With the direction of the scale economy theory, this paper analyzes the advantage and opportunity, disadvantage and threating of the Suqian wood processing industry by using SWOT analysis method. Then this paper studied on the five scale efficiency evaluation methods, they are Production function method, Long-term average cost curve method, Market concentration method, Engineering method and Comprehensive evaluation method. According to the standard of objectivation, scientific, concise and practical to practice, after testing the five methods, it choose Industry concentration index and Cobb-Douglas production function method in the whole studying process. Through the estimation of economies of scale in Suqian wood processing industry this paper summarizes the following conclusions. Firstly, the large scale enterprises which can affect the whole industry has a low industry concentration. Secondly, the leading enterprises’return of scale is now in the increasing stage, the whole industry is in the diseconomies of scale status. This means Suqian wood processing industry is only in the beginning of economic efficiency promotion, the industrial scale has a great potential in further expansion and the economies of scale can also be enhanced in the future. In the last, with the combination of qualitative SWOT method and quantitative economies of scale estimation method, this paper presents the four strategics of the Suqian large-scale development of wood processing industry. First, industrial organization strategy. Through the strategic collaboration, regional concentration and core technology to promote the Suqian wood processing industry more and more group and specialization. Second, product structural adjustment. Through the adjustment of the products to improve the market competitiveness and influence. Third, government macro-control policy. Through the sustainable development policy to improve the inherent vitality of the industry and also create a favorable environment for the industry’s development. Fourth, brand building and technology innovation strategy. Centering on the "Italian poplar’s hometown of China" and establishing the regional wood processing brand to improve the economic efficiency, competitiveness and the brand influences of the Suqian wood processing industry.