2019 International Conference on Energy, Power, Environment and Computer Application (ICEPECA 2019) ISBN: 978-1-60595-612-1
Studies on the Efficiency Characteristics of the Economic Development in Fujian Province Based on DEA and Malmquist Index Hong LEI and Xue-yan HUANG School of Business Administration, Jimei University, Yinjiang Road No. 185, Xiamen, Fujian, P.R. China
Keywords: Data envelopment analysis, Economic efficiency, Malmquist productivity Index.
Abstract. In this paper, the efficiency characteristics of the economic development of nine cities in Fujian Province are chosen as the research object, collecting 2001-2014 of nine cities in Fujian input-output data, using data envelopment analysis (DEA) combined with Malmquist productivity index, and the technical efficiency, pure technical efficiency and scale efficiency and total factor productivity are calculated. According to the calculation results, the efficiency characteristics of economic development in different areas are analyzed, and the nine cities are divided into three types according to the efficiency characteristics, and the corresponding policy suggestions are proposed.
Introduction Fujian province is the starting point of the maritime Silk Road. Since the policy of reform and opening, especially the accession to the WTO, remarkable results have been achieved in the economic development in Fujian; GDP increased from 407 billion Yuan in 2001 to 2405 billion Yuan in 2014, ranking eleventh in the country. At the same time, in the process of economic development, the unbalanced problems in regional development still exist, and the economic development is uneven in efficiency. It is an important problem to analyze the economic development efficiency of various regions in Fujian, to seek the countermeasures for improving the economic efficiency and to promote the balanced development of various regions. In this paper, the DEA is used to calculate technical efficiency, pure technical efficiency, scale efficiency and total factor productivity of economic development in Fujian in 2001-2014, which provides a useful reference for the sustained and healthy development in Fujian Province economy in the future.
Research Methods and Models Data Envelopment Analysis DEA is a kind of "data-oriented" method, which is used to measure the efficiency of decision making units with multiple inputs and multiple outputs. DEA has a unique advantage in the efficiency evaluation, it does not need estimated parameters in the prior, nor make data dimensionless, also in a great extent avoid the influence of subjective judgment of decision maker's on the evaluation results. T T CCR model: min (e s e s ) n n s.t. X j j s X 0 ,Y j j s Y0 ( j 0, j 1,2,n;s 0, s 0) j1 j1 BBC model: min[ (eT s eT s )] n n n s.t. X j j s X 0 ,Y j j s Y0 , j 1( j 0, j 1,2,,n;s 0, s 0) j1 j1 j1 λ In formula, j is ratio of the j-th DMU in the effective combination of reconstruction DMU is DMU relative to the combination of decision making units i ; n is the total of DMU; m and t
439 X respectively is input (resource consumption) and output (products); ij is the i-th resource input Y for the j-th DMU; rj is the r-th output for the j-th DMU ; S , S are the slack variables, that respectively is on behalf of the redundancy of the input and the deficiency of output; ε is Archimedean infinitesimal, or ε = 10-6 ; θ is a valid value for the DMU, namely relative efficiency of input relative to output. Malmquist Productivity Index Malmquist productivity index is used to measure the Total factor productivity (TFP), and TFP is the economic growth rate caused by other input factors except the labor and capital, often seen as indicators of the progress of science and technology. The sources of TFP include technological progress, organizational innovation, specialization and production innovation, and so on. Malmquist productivity index is widely used in the research of the change of production efficiency. The index TFP can not only be used to measure dynamic change of Total Factor Productivity ( ch ), and this change is further decomposed into three important components, that is technological progress TE PTE SE change ( ch ), pure technical efficiency change ( ch ) and scale efficiency change ( ch ). TFP TE PTE SE Namely, ch ch ch ch
Choice to Index and Data Sources Choice to index. Using DEA model to evaluate the efficiency of regional economic development, the key is to choose the index system of input and output. According to the scholar's research[1]-[7], and considering the characteristics of economic development in Fujian, this paper selects input indicators as follow: the fixed assets investment in the whole society (ten thousand Yuan) and the fiscal expenditure (ten thousand Yuan); output indicators selected as follow: GDP (100 million Yuan), the per capita disposable income of urban residents (Yuan) and the per capita net income of rural residents (Yuan). Data sources. The data were chosen from “the Fujian statistical yearbook” of each year and “statistical yearbook” of nine cities in Fujian in 2001-2014. The DEAP2.1 software is used to calculate and get the efficiency value.
Results and Explanations Explanations to Economic Efficiency Status in Different Regions of Fujian Table 1. Technical efficiency values of 9 cities in Fujian in 2001-2014. year Fuzhou Xiamen Putian Sanming Quanzhou Zhangzhou Nanping Longyan Ningde mean 2001 0.809 0.607 1.000 0.901 1.000 0.954 0.897 0.932 0.757 0.873 2002 0.794 0.565 1.000 1.000 1.000 1.000 0.817 0.875 0.939 0.888 2003 0.860 0.651 1.000 0.819 1.000 1.000 0.799 0.884 0.804 0.868 2004 0.897 0.641 1.000 0.876 0.993 1.000 0.798 1.000 0.784 0.888 2005 0.854 0.660 1.000 0.817 1.000 0.940 0.767 1.000 0.837 0.875 2006 0.834 0.512 1.000 0.811 1.000 0.893 0.780 1.000 1.000 0.870 2007 0.811 0.509 1.000 0.754 1.000 0.925 0.732 0.879 1.000 0.846 2008 0.772 0.619 1.000 0.910 1.000 0.863 0.749 0.896 1.000 0.868 2009 0.781 0.757 1.000 0.885 1.000 0.804 0.817 0.847 1.000 0.877 2010 0.774 0.857 1.000 0.867 1.000 0.769 0.828 0.842 1.000 0.882 2011 0.723 0.968 1.000 0.855 1.000 0.787 0.845 0.862 1.000 0.893 2012 0.784 1.000 1.000 0.825 1.000 0.781 0.881 0.864 1.000 0.904 2013 0.717 1.000 1.000 0.850 1.000 0.823 0.842 0.873 1.000 0.901 2014 0.753 1.000 1.000 0.856 1.000 0.843 0.847 0.882 1.000 0.909 From the point of view of the efficiency of economic development in Fujian, the technical efficiency values are above 0.8 in 2001-2014, and are at a higher level. The technical efficiency value is in a stable state with only small fluctuations in 2001-2006. Respectively, the technical
440 efficiency values were 0.846 and 0.868 in 2007-2008, at the lowest value in14 years. The value of technical efficiency is basically in an upward trend in 2009-2014, which reached the highest value in 14 years at 2014. It showed that the efficiency of economic development in Fujian is in the rising stage, and the development trend is good. Results show that the technical efficiency levels of Putian were 1.000.Quanzhou in 2004 did not achieve the best technical efficiency. Because of the technical efficiency of Ningde is 1.000 in 2006, which indicates that the development trend is good. In contrast, Fuzhou and Xiamen are the most economically developed areas in Fujian, but the annual average value of technical efficiency is at a low level. The technical efficiency value is non-effective due to non-effective of pure technical efficiency and scale efficiency, which can be optimized by adjustment in the long-term. Table 2. Pure technical efficiency values of economic efficiency of 9 cities in Fujian in 2001-2014. year Fuzhou Xiamen Putian Sanming Quanzhou Zhangzhou Nanping Longyan Ningde mean 2001 0.814 1.000 1.000 1.000 1.000 0.957 0.903 0.938 0.767 0.931 2002 0.798 1.000 1.000 1.000 1.000 1.000 0.833 0.877 0.953 0.940 2003 0.864 1.000 1.000 0.994 1.000 1.000 0.822 0.885 0.816 0.931 2004 0.903 1.000 1.000 0.881 1.000 1.000 0.825 1.000 0.810 0.935 2005 0.854 1.000 1.000 0.945 1.000 0.940 0.805 1.000 0.903 0.939 2006 0.837 1.000 1.000 0.969 1.000 0.894 0.838 1.000 1.000 0.949 2007 0.812 1.000 1.000 0.754 1.000 0.967 0.792 0.979 1.000 0.923 2008 0.775 1.000 1.000 0.918 1.000 0.897 0.817 0.933 1.000 0.927 2009 0.793 1.000 1.000 0.909 1.000 0.824 0.891 0.848 1.000 0.918 2010 0.782 1.000 1.000 0.889 1.000 0.770 0.911 0.843 1.000 0.911 2011 0.725 1.000 1.000 0.873 1.000 0.790 0.889 0.865 1.000 0.905 2012 0.786 1.000 1.000 0.849 1.000 0.787 0.948 0.866 1.000 0.915 2013 0.718 1.000 1.000 0.875 1.000 0.826 0.900 0.880 1.000 0.911 2014 0.755 1.000 1.000 0.887 1.000 0.851 0.909 0.890 1.000 0.921 From the point of view of average, the pure technical efficiency of Fujian in the 2001-2014 is at a high level, the minimum value is 0.905, there are fluctuations in some years, but the volatility is small. The performance of pure technical efficiency value of Xiamen, Putian, Quanzhou is the best, annual technical efficiency value of the three cities is 1.000, indicating that they have a competitive advantage in the use of resources. Pure technical efficiency value of Fuzhou is not too high, the value of pure technical efficiency in Zhangzhou is basically in a downward trend in 2011-2014. The two cities all need to improve the pure technical efficiency value. Table 3. The scale efficiency of economic efficiency of 9 cities in Fujian in 2001-2014. year Fuzhou Xiamen Putian Sanming Quanzhou Zhangzhou Nanping Longyan Ningde mean 2001 0.994 0.607 1.000 0.901 1.000 0.996 0.994 0.993 0.987 0.941 2002 0.996 0.565 1.000 1.000 1.000 1.000 0.981 0.997 0.985 0.947 2003 0.995 0.651 1.000 0.824 1.000 1.000 0.971 0.999 0.985 0.936 2004 0.993 0.641 1.000 0.995 0.993 1.000 0.967 1.000 0.968 0.951 2005 0.999 0.660 1.000 0.864 1.000 0.999 0.952 1.000 0.926 0.934 2006 0.997 0.512 1.000 0.836 1.000 0.999 0.931 1.000 1.000 0.919 2007 0.998 0.509 1.000 0.999 1.000 0.956 0.925 0.898 1.000 0.921 2008 0.997 0.619 1.000 0.991 1.000 0.962 0.916 0.961 1.000 0.938 2009 0.986 0.757 1.000 0.974 1.000 0.975 0.917 1.000 1.000 0.956 2010 0.989 0.857 1.000 0.975 1.000 1.000 0.909 0.999 1.000 0.970 2011 0.997 0.968 1.000 0.980 1.000 0.996 0.951 0.997 1.000 0.988 2012 0.998 1.000 1.000 0.973 1.000 0.991 0.929 0.997 1.000 0.988 2013 0.998 1.000 1.000 0.971 1.000 0.996 0.936 0.992 1.000 0.988 2014 0.997 1.000 1.000 0.965 1.000 0.991 0.932 0.991 1.000 0.986 The average of the scale efficiency of Fujian is more than 0.9, at a higher level. In 2001-2005 the scale efficiency is in the state of small fluctuations, and the difference is not large. The scale efficiency was the lowest in 2006, which was 0.919. However, from 2006-2014, the scale efficiency is on the rise, and in the 2011-2013 reached the maximum value. The results show that the annual
441 scale efficiency of Putian is 1.000, indicating that the input and output reach the optimal state. Quanzhou also performed better in scale efficiency, the scale efficiency reached the optimal in the rest of the year except 2004. The annual average of the Scale efficiency of Xiamen is at the low level in 2001-2008, but the scale efficiency increased gradually after 2008, and in 2012-2014 reached optimal, which indicates Xiamen should achieve the optimum efficiency through a long-term adjustment. Table 4. The scale returns of economic efficiency of 9 cities in Fujian in 2001-2014. year Fuzhou Xiamen Putian Sanming Quanzhou Zhangzhou Nanping Longyan Ningde 2001 drs drs crs drs crs irs irs irs irs 2002 irs drs crs crs crs crs irs irs irs 2003 drs drs crs drs crs crs irs irs irs 2004 drs drs crs irs drs crs irs crs irs 2005 irs drs crs drs crs irs irs crs irs 2006 irs drs crs drs crs irs irs crs crs 2007 irs drs crs irs crs drs irs drs crs 2008 irs drs crs irs crs drs irs drs crs 2009 irs drs crs irs crs drs irs crs crs 2010 irs drs crs irs crs crs irs irs crs 2011 irs drs crs irs crs irs irs irs crs 2012 irs crs crs irs crs irs irs irs crs 2013 irs crs crs irs crs irs irs irs crs 2014 irs crs crs irs crs irs irs irs crs In the theory of economics, the scale economy is divided into three kinds of situations: CRS (constant returns to scale), IRS (increasing returns to scale) and DRS (diminishing returns to scale). From the table 4, Putian is the best performance in the scale returns, the annual average rate of return reached the optimal. Followed by Quanzhou, the scale returns also reached the optimal in the other each year, except 2004 which is in the scale of diminishing returns. Scale efficiency is equal to 1.000, which means the scale return is at the state of CRS, that is, in the most appropriate scale of production, there is the most ideal economic development. Analysis of Total Factor Productivity of Fujian Table 5. Malmquist productivity index on the economic efficiency change in Fujian. year technical efficiency Technology pure technical scale efficiency TFP change change progress change efficiency change change 2002 1.013 1.056 1.010 1.003 1.070 2003 0.984 0.920 0.991 0.993 0.906 2004 1.021 0.957 1.005 1.016 0.977 2005 0.987 0.864 1.004 0.983 0.852 2006 0.984 0.889 1.011 0.974 0.876 2007 0.971 0.864 0.969 1.002 0.839 2008 1.035 0.903 1.006 1.028 0.934 2009 1.016 0.896 0.991 1.026 0.911 2010 1.006 0.901 0.990 1.016 0.907 2011 1.012 0.932 0.993 1.019 0.943 2012 1.013 0.898 1.013 1.000 0.909 2013 0.995 0.893 0.995 1.001 0.889 2014 1.011 0.916 1.013 0.998 0.926 Mean 1.004 0.914 0.999 1.004 0.917 Only in 2002 the TFP change is positive growth in the table 5, and the rest of the annual average rate is less than 1.000, in a state of negative growth. The change trend in technical progress is consistent with TFP, in the rest of the year is less than 1.000, except 2002 in the state of positive growth with small fluctuations, but that of Fujian as a whole technological innovation capability has not improved significantly, government should increase the intensity of technological innovation.
442 C. Regional differences in the efficiency of economic development in Fujian. Table 6. The mean of economic efficiency of 9 cities in Fujian in 2001-2014. city technical pure scale technical technical pure scale efficienc technical efficiency efficienc progress technical efficienc TFP y efficienc y change efficienc y change change y y change Fuzhou 0.809 0.814 0.994 drs 0.994 0.944 0.994 1.000 0.939 Xiamen 0.607 1.000 0.607 drs 1.039 0.930 1.000 1.039 0.966 Putian 1.000 1.000 1.000 - 1.000 0.896 1.000 1.000 0.896 Sanming 0.901 1.000 0.901 drs 0.996 0.917 0.991 1.005 0.913 Quanzhou 1.000 1.000 1.000 - 1.000 0.933 1.000 1.000 0.933 Zhangzhou 0.954 0.957 0.996 irs 0.991 0.923 0.991 1.000 0.914 Nanping 0.897 0.903 0.994 Irs 0.996 0.900 1.001 0.995 0.896 Longyan 0.932 0.938 0.993 irs 0.996 0.897 0.996 1.000 0.893 Ningde 0.757 0.767 0.987 irs 1.022 0.885 1.021 1.001 0.904 mean 0.873 0.931 0.941 1.004 0.914 0.999 1.004 0.917 From table 6, the average technical efficiency of Putian and Quanzhou is 1.000 in 2001-2014. The technical efficiency value of Xiamen is the lowest, only 0.607. The pure technical efficiency of Xiamen is 1.000, the scale efficiency is 0.607, indicating that the non-effective of the technical efficiency of Xiamen is due to the non-effective of the scale efficiency, and in a state of diminishing returns to scale in Xiamen, which may be appropriate to reduce the resources input. The technical efficiency value of Ningde is low, only 0.757. The pure technical efficiency and scale efficiency were 0.767 and 0.987, the low technical efficiency value in Ningde is caused by the low pure technical efficiency, Ningde can exert the potential for economic development through technical innovation. According to the feature of the technical efficiency value, pure technical efficiency value and scale efficiency value in Fujian, all cities can be divided into three classes according to the efficiency of resources allocation. Quanzhou and Putian are in the First class. Technical efficiency, pure technical efficiency and scale efficiency reached 1.000, that is, technology is effective and scale effective, which shows that the economic development is relatively effective. Xiamen and Sanming are in the second class. Technical efficiency value, the scale efficiency value is less than 1.000, the pure technical efficiency value is 1.000, which indicates that the input and output state has reached the best, but it has not reached the scale efficiency. Fuzhou, Zhangzhou, Nanping, Longyan and Ningde are in third class. Three kinds of efficiency values are all less than 1.000, which indicate that there is a shortage of input redundancy or output in order to achieve effective technology and effective scale. From the point of view of efficiency change of growth, the value of TFP and the change value of technological progress in 9 cities are less than 1.000, which are in negative growth condition. To investigate its reason, the investment of economic development of those cities is insufficient in terms of technical innovation, the current competitive pressure and immediate interests is more concerned, so as not to take consideration and correct decision-making in economic development at a long-term. However, from the perspective of technical efficiency changes, Ningde and Xiamen, the technical efficiency values are greater than 1.000, in a state of growth. Xiamen is a special economic zone, and technological innovation is in the leading level. While Ningde is a relatively backward area in Fujian, according to the theory of late-development advantage, Ningde is backward in technological innovation, which can promote the technological progress of the local through technological imitation and innovation.
Acknowledgements This research was financially supported by the Fujian Social Science Research Fund (FJ2016B138).
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