Efficiency Analysis On Modern Services Of Bo Hai Coastal Region

Modern Services is one of the important symbols to measure if the state is competitive. Modern services, which has been become the engine of economic growth, have a significant impact on social economy and national prosperity. With the steady improvement in overall national strength of China, some provinces have been into a new stage of service. Bo Hai Coastal Region is one of the three major economic circles belt in China, which is account for about 40% of GDP. The development of Bo Hai coastal region need to enhance regional competitiveness, which is inseparable from changing the model of economic development. Therefore, accelerating the modern service industry has become an objective requirement of regional development. Measuring the effectiveness of modern services can be illustrated by using efficiency. For modern service industry, efficient development means efficient allocation of available resources. The empirical research has indicated that there’s an obvious gap about development of modern service industry between Bo Hai coastal region and the Yangtze River Delta. This paper use DEA(Data Envelop Analysis) as a research method to measure the efficiency analysis on modern services of Bo Hai Coastal Region. Considering the limitations of traditional DEA method in phase one and the circumstances in which Bo Hai Coastal Region live, this paper use phase three method to study the efficiency of modern services of Bo Hai Coastal Region. First stage using traditional DEA to measure the efficiency; second stage using SFA(Stochastic Frontier Analysis) to do regression analysis; third stage again do the traditional DEA to analyze efficiency by adjusting the input values in first stage. Compared with traditional DEA methods, three stages in the analysis of DEA eliminate the effect of random errors and environment factors. As a result, improving homogeneity of DMU, measurement could be more objective and accurate. Moreover, this paper do comparative analysis with Delta economic zone and Pan-Pearl River Delta Economic Zone in terms of efficiency, identify the problems and the gap between Bo Hai Coastal Region and other region. It can be concluded by the empirical analysis that the efficiency of modern services of Bo Hai Coastal Region is not high, particularly far below Delta economic zone. The primary cause is pure technical efficiency is low. After excluding the environmental impact, the measure value has decrease in a way, indicating that the efficiency has been greatly influenced by environment factors. Consequently, Bo Hai Coastal Region should pay more attention to the improvement of ability of its own operations.