X-efficiency of toll road companies: The case of China

Accurate identification of efficiency losses in toll road companies is important for optimizing their operational management. This paper measures the X-inefficiency of state-owned toll road companies (STRCs) using a stochastic frontier analysis model, with external influencing factors analyzed via principal component analysis. The evolutionary characteristics of X-inefficiency of STRCs are further summarized using kernel density analysis. The panel data of 26 STRCs in China from 2013 to 2019 is used. The study shows that the mean value of X-inefficiency of STRCs is 0.453. Regional analyses show that the Chinese STRCs with higher X-efficiency losses are mainly located in the western and southeastern coastal regions, while the X-inefficiency of STRCs in the central region is lower. Evolutionary analyses show that the X-efficiency of STRCs tends to decline over the period and the difference in the efficiency level of STRCs between regions exhibits a widening trend. The findings of this paper expand the research outreach of the X-efficiency theory, which is of practical significance in helping Chinese STRCs to achieve sustainable development.