Enterprise Factor - Total Productivity Evolution: Based On Dynamic

This paper uses the stochastic frontier function, analyzed the contribution of total factor productivity in China general machinery manufacturing growth condition and the four indicators of the total factor productivity growth in the overall situation, and study Chinese general equipment manufacturing industry. In order to carry out the analysis, firstly, the author choses the stochastic frontier function as the theoretical framework selection, and divides the growth of TFP into four parts. The key part in the process of analysis is the selection of the measurement model and the database as well as the matching of data processing in the measurement model, that the writer gives a choice of setting specific forms of technical inefficiency error, production function and related variables; selects1998-2007China’s large enterprise database in the database matching and data processing;and improve the matching method with the previous research. Through empirical analysis and econometric results we can find that general machinery manufacturing has a steady growth of total factor productivity and in the industry there is technical progress and scale efficiency change and allocative efficiency of factors contribute to the growth of TFP, but the efficiency of frontier technology has a negative effects to TFP growth. And we find that the gap between the advanced enterprises and the average level of the enterprise is in the expansion, China general machinery manufacturing industry has a low efficiency compared with manufacturing industry.Next is the study of the evolution of China’s general machinery manufacturing technology efficiency from the perspective of the evolution of the enterprise. We toanalyzes TFP of China’s two digit industry sub-sectors with the stochastic frontier, and mainly focus on technical efficiency (TE) distribution with time variation. We find that the average technical efficiency level of Chinese manufacturing enterprises in the inspection period is worsening. In addition, we analyzes and evaluates the influence of the entry and exit on the overall technical efficiency using Dynamic OP decomposition method. The conclusion of this paper is that, entry-companies do not represent the efficiency of enterprises and has a extremely limited positive impact on the overall efficiency. Positive efficiency change mainly comes from the exit of low efficiency of enterprises, which has been the main way of the improvement of technical efficiency before2006. The results of this analysis will allow us to doubt that the reallocation of resources production from the entry and exit increase a not obvious effect or even negative effect for the whole economy. This also proves the conclusion:Schumpeter’s the proposition of innovation is not established in China, and the advanced enterprises’ progressive sustaining innovation, is a major source of technology to enhance the level of general machinery and equipment manufacturing.The current Chinese economic reform has not yet been completed, and the economic development situation is perplex, so the problem is not difficult to find the answer in this environment. The question is put in order to solve the problem. In view of the above conclusions, this paper puts forward some suggestions for the healthy development of the China general machinery equipment manufacturing industry.