Research On The Regional Differentiation Of Productivity In Coal Industry Of China

Over the past two decades, measurement and decomposition of the productivity has attracted more and more intention in economics. The decomposition and calculation of the TFP are of key importance for evaluating the difference between the resources that accelerates the economy growth in different areas.However, the lack of coal resource in eastern China at present makes the large falling mines urgent transfer from east to west to avoid the closure. With this in mind, we calculate the TFP of coal industry of different provinces to study the whole developmental level of coal industry, the disparity and characters of the productivity among different provinces. What's more, we examine the exogenous and endogenous factors which cause the disparity of productivity in coal industry, which is of great importance to the policy implications for trans-regional strategy.Using the stochastic frontier production model based on MCMC method, this paper examined the total factor productivity (TFP) growth of large and medium-sized coal enterprises among 16 provinces during the years 1993-2006 in China. By the test of panel unit root and panel cointegration, we also analysized the tendency of the TFP's decomposition of coal industry.The annual growth of TFP in China's large and medium enterprises of coal industry is speeding up, but the growing mode is very different for the enterprises in different production phases. For the new enterprises in the west district with high reserves, the frontier technological progress has already become the core motive of TFP growth, whereas the technological progress of the old enterprises develops much more slowly. On the other hand, these new enterprises have lower level of the technical efficiency than that of the old firms, and the gap is getting larger. The scale economy and the allocative efficiency vary in different provinces. And the scale dis-economy is the common feature of the coal industry in the west. The allocative efficiency of the coal industry in the west can't keep up with that of the old ones in the east and middle districts due to faultness of capital and labor market.We used the modified panel unit root test to analyze the convergence of each resources of TFP, following the decomposition of the TFP of coal industry. The results show that the capital accumulation per worker is convergent, but another two important forces of TFP, Technological progress and technical efficiency, don't have absolute convergence. The speed of the Technological progress is contrary to the time of coal production, and the technical efficiency and scale economy show an inverted U-shaped relation to the time of coal production. This fact indicated that before the insolvency of old mines, many veteran workers have been fired, which deserves much attention.Based on the theoretical analysis, this work also examined some main exogenous influences on the productivity of coal industry. By the model of panel cointegration, it is found that human capital of high education levels, coal price, coal market concentration rate and the demand from the downstream firms all have impacts on the TFP of coal industry.Finally, according to the regional differentiation of TFP in coal industry, this paper proposed two issues which are very important in the trans-regional strategy of coal industry. The first issue is the timing of transfer, only when the falling mines are still competitive in their human capital, the shift could be beneficial to the whole industry. The second issue is the mode choice of trans-regional strategy. The falling mines should choose proper strategy including annex, unite, mergers and acquisitions according to the productivity of their own and the character of the local mines.