Does Openness Increase the Efficiency of China¡¯s Manufacturing Firms? Evidence from the World Bank Investment Climate Survey

Wenjun Liu () and Shuliang Zou
Additional contact information
Shuliang Zou: College of Economics and Management, University of South China, Hengyang 421001, China

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2013, vol. 8, issue 3, 430-451

Abstract: Based on the World Bank Investment Climate Survey, this paper investigates the openness effects on the efficiency of firms in China¡¯s manufacturing industry using a two-step data envelopment analysis (DEA) approach. In the first step, the aggregate efficiency of open firms and non-open firms is compared in each sub-industry using a group-wise heterogeneous bootstrap procedure. The results show, at a 90% confidence level, that open firms are more efficient than non-open firms in four out of five sub-industries. Furthermore, in the second step, we employ the two-stage bootstrap DEA approach to more specifically evaluate the effects of openness on the efficiency of firms. The regression results show that three openness indicators (foreign capital, import and export) have strong positive effects on firms¡¯ efficiency in China¡¯s manufacturing industry. In addition, the results also suggest that a larger state share, larger firm size, and more capital stock are negatively related to the efficiencies of firms, while a firms¡¯ learning and absorptive capacity is positively related to its efficiency.

Keywords: openness; efficiency; China; DEA; Investment Climate Survey (search for similar items in EconPapers)
JEL-codes: C15 D24 O19 O49 (search for similar items in EconPapers)
Date: 2013
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://journal.hep.com.cn/fec/EN/10.3868/s060-002-013-0021-7 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fec:journl:v:8:y:2013:i:3:p:430-451

Access Statistics for this article

Frontiers of Economics in China-Selected Publications from Chinese Universities is currently edited by LONG Jie

More articles in Frontiers of Economics in China-Selected Publications from Chinese Universities from Higher Education Press
Bibliographic data for series maintained by Frank H. Liu ().