Technical Efficiency And Influencing Factors Of China Iron And Steel Industry

The production of China steel industry has been the top in the world for 19 years,promoting the national economy developing in a high speed.However,due to many factors,such as the asymmetry of market information,irrational investment of enterprises,low level of scale expansion,and the decline of market demand,Chinese steel industry still suffers from problems like low concentration,poor product quality,insufficient products with high added value,grim fact of overcapacity,less investment in research and development,serious environmental pollution,low energy efficiency,and irrational structure,etc.In the final analysis,these problems can come down to the matter of efficiency,whichcan directly restrict the development of competitiveness and the sustainable development of Chinese steel industry.Therefore,some fundamental measures,like strengthening the independent innovation of steel enterprises,establishing and perfecting the self-innovation system,improving industry concentration,and solving the problem of overcapacity,are able to radically improve industrial efficiency,and promote China transforming from a large manufacture country into a powerful one.Based on the characteristics of steel industry(including high energy consumption,high pollution,and high consumption),panel data of 26 Chinese provinces from 2005 to 2013 are first selected in this paper.According to these data,each province's annual technical efficiency can be acquired by taking thegeneral energy consumption,fixed assetsinvestment,population of workers and consumption of iron ore as the input indicators,and gross output value of steel industry as the output indicator.Then,the provincial infrastructure level,marketization level,and opening up level are regarded as the technical non-efficiency item whose influential factors can be analyzed using the Data Envelopment Analysis(DEA)method combined with OLS regression analysis.Results show that;1)The technical efficiency of Chinese steel industry varies from regions,which is the highest in the easternChina,the second in the middle China,and the lowest in the westernChina.The difference of technical efficiency also exists among different provinces;2)The overall technical efficiency level is not high and problems such as irrational structure of products,lack of technical innovation,inconspicuous scale effect when scaling fast and overcapacity,still exist;3)From the influential factors,the technical efficiency can be positively promoted by theinvestment in fixed assets,population of workers,consumption of iron ore,and marketization level,with the correlation coefficients of 0.396,0.13,0.051,and 3.18,accordingly,whereas the infrastructure level,opening up level are negatively correlated with the technical efficiency,with the significant negative correlation coefficients of-0.62 and-0.11 respectively.From these coefficients,we can see that the consumption of iron ore has the minimum effect on the technical efficiency while the marketization level's effect is the maximum and the general energy consumption fails to pass the test.At last,according to the aforementioned results and the China's current reality,suggestionson technical innovation,prioritized development,phasing out,forming circular economy and improving the industry concentration are proposed in this paper.