The Analysis Of Chinese Small Private Tve's Development

A prominent achievement of China economic reform starting from 1978 is the rapid development of lyE. The development of TVE has been contributing to the whole economy significantly by absorbing rural surplus laborers, raising local financial revenues, and increasing farmers?income. In mid-1990s, however, this development trend became stagnant. The causes included tougher market competitions, lower government supports, greater economic difference among regions, etc. However, such stagnancy existed mainly in the development of TVE with collective ownerships. Small private TVE in the same period grew relatively quickly. What were the reasons for these enterprises to outpace others? What would be their limitations in further development? And how are the effects? How can these enterprises remove the limitations effectively? In addition, what are the technology efficiencies of the small private TVE What are the limitations of technology efficiencies? These questions are the issues behind the distinctive development of small private TVE, and they are also what this dissertation is trying to analyze. The children garments factories in Zhili Township, Zhejiang Province, were chosen as samples. Data in five periods of 120 randomly selected factories were collected, and 325 valid observations were finally used. The data include both internal and external factors that influence the operations of private TVE. Single factor analysis show that capital and labor input as well as technology efficiency have direct effects on a factory output. Other influential factors include the enterprises?history, management, laborers?skills, and allocation of resources. Stochastic frontier production function was applied for further econometric analysis on technology efficiencies of small factories and factors affecting the efficiencies. The results show that capital input has a more significantly positive effect on output than labor input. Technology efficiencies also affect output significantly. Positive factors on technology efficiencies include educational level of managers, allocation of resources, and average age of workers. Other factors that affect technology efficiencies are managers?experience, decision making authority, and sources of funds. The major conclusions of this study are: 1) Small private TVE have great potential for further develop. 2) An effective way to increase an enterprise output is to improve its technology efficiency. 3) Higher technology efficiency can be reached by improving managers? competence, providing more worker training, increasing technology avenue and smoothing capital turnover.