China's Iron & Steel Listed Company Production Efficiency Analysis

Iron and steel industry is pillar of the national economy. As one of the most important national economy link, it connects not only the industries of coal and Iron ore, but also of machinery, construction and real estate, traffic, shipbuilding and home appliances. The development of iron and steel industry is of much influence. It is the important logo of the national economy's level and strength. China's steel output roses to 200 million tons from 100 million tons in just six years (1997 -2003) .The dramatic output may be due to the increase in productivity but more likely due to the dramatic invest in the iron and steel industry these years. Which is the reason that caused China iron and steel industry production growth, increased factor inputs or total factor productivity? What are the factors that hindered the progress of total factor productivity? Clarify these issues is no doubt very important in economic value, and is of great significance for China's iron and steel industrial sector and enterprises to develop scientific and strategic decision-making.In this paper, we apply the data envelopment analysis (DEA)to do empirical research. DEA is a productivity method of linear programming, which is appropriate for border production functions of multi-input and multi-output. This paper does an empirical analysis for representative 23~2 enterprises selected from listed companies in China's steel industry. This paper does production efficiency, pure technical efficiency and scale efficiency empirical analysis including both horizontal and vertical analysis of contrast by seven indicators of pig iron production, steel production, steel production, operating income, total assets, operating costs and the staff of enterprises. Selected data are from 2004 to 2007.From the analysis we can see that among the 23 chosed companies there are 12 to 10 companies from 2004 to 2007 which are of scale efficiency; there are 16 to 21 companies from 2004 to 2007 which are of pure technology efficiency; there are 7 to 3 companies from 2004 to 2007 which are of total factor productivity through both horizontal and vertical analysis of contrast.Existing research results have considered scale efficiency and technology efficiency as the important points. In this paper we consider TFP to analysis iron and steel productivity based on existing research results. We make several useful policy suggestions to help improve our country's productivity. They are as follows: (l)To improve the whole iron and steel industry concentration to improve scale efficiency by means of internal expansion and external integration;(2) Core business integration of iron and steel industry should be considered to improve technology efficiency.Because of my limited academic level and time restrictions, this paper only choose 23 listed companies and use the data from 2004 to 2007,and only choose 7 indicators to do research. So the conclusions in this paper maybe affect the accuracy and representative of analysis results to some extent.