Regional technical efficiency of Chinese Iron and steel industry based on bootstrap network data envelopment analysis

This paper analyses the regional technical efficiency of Chinese iron and steel industry from 1996 to 2010 by a network DEA procedure, and provides the smoothed bootstrap network DEA strategy for the sensitivity analysis of the efficiency measure to sampling variation of the estimated frontier. Furthermore, the evolution and convergence characteristics of regional technical efficiency are examined by a dynamic regression model based on different regional divisions of China. The empirical results show that there exist significant geographical differences in the technical efficiency of Chinese iron and steel industry. On the one hand, the technical efficiency of the eastern area, the central area and the western area is unbalanced, with a lower efficiency in the west and a higher one in the east. On the other hand, technical efficiency of Central Bohai, Yangtze River Delta and Pearl River Delta economic zones is higher than that of the other economic zones. In addition, the technical efficiency has a significant improvement during the period of the Eleventh Five-Year Plan. Following the convergence notation in economic growth theory, this paper also gives some convergence evidence of the technical efficiency towards the efficient frontier due to the catching-up effect. Finally, this paper explores the determinants of the technical efficiency, and discusses policy implications for Chinese iron and steel industry.