Empirical Analysis of Technical Efficiency of Chinese Coal Industry on Frontier Production Function

Abstract

The technical efficiency for the coal industry of China has been estimated in this paper. A stochastic frontier production function on Frontier Production Function has been used for the purpose. Panel data from the coal industries for the year 2006 have been used for empirical estimations. Making use of the software package Eviews 5.0, the model has been estimated by the least squares method. The overall average technical efficiency is estimated to be 0.51 for the coal industry of China. The empirical results suggest the average efficiency is low. Thus improving the efficiency of coal industry is one of the current important problems.