A Panel Data Approach to Measurement of China’s Agricultural Industry on Provincial Level Technical Efficiency: a Cobb-Douglas Fixed Effects Stochastic Frontier Model
This paper applied the Cobb-Douglas stochastic frontier production function and the panel data model with time-varying fixed effects to analyze the 11-year panel data of 31 provinces in Shandong, Guangdong, Hunan, Henan, and Beijing, and then study and explore these Provincial agricultural technical efficiency. The results show that the Cobb-Douglas fixed effects stochastic frontier model can effectively evaluate the technical efficiency of different provinces. Through analysis, we can see that the technical efficiency of most provinces in China is on the rise. On the one hand, we see that the provincial-level differences in the technical efficiency of agriculture in China are very different. For example, as of the end of 2012, Guangdong and Shandong are close to the production boundary. In particular, the technical efficiency of Guangdong Province is as high as 0.9999 for 11 consecutive years. However, the technical efficiency of Tibet, Qinghai, and Ningxia are very low, especially in Tibet. Its annual average technical efficiency is only 0.0211. On the other hand, the difference in provincial technical efficiency also indicates that there is still much room for improvement in the technical efficiency and productivity of underdeveloped provinces.
Keywords - China, Cobb-Douglas production function，Fixed Effects，Panel Data, Stochastic Frontier Analysis, Technical Efficiency,