DEA-Based Efficiency Analysis Of Service Industry In China

Service industry is also called tertiary industry, and its development level is the important sign, which weighs the development level of a country or regional economy. The growth of the service industry in China has been keeping fast since China began to calculate the production value of service industry in 1985. But for a long time, China has emphasized extension development and payed more attention to scale than efficiency which covers up the existing problem in the service industry, so that efficiency of service industry is generally low, and integrative strength is weak, which can't adapt to the requirements of era's development. Mass management, the core of which is improving efficiency becomes the target of the service industry development. Therefore, studying on efficiencies of service industry is important for realistic meaning.In this thesis, the efficiencies of china's service industry have been evaluated using DEA method based on reviews of the past research. The main DEA models are BC2 and C2R. First, the technical efficiency, pure technical efficiency and scale efficiency of every province in one year are compared in crosswise analysis. Second, the efficiency of each province from 1996 to 2005 is evaluated in longitudinal analysis. Finally, time and space are combined in general analysis to find the movement trend of service industry's efficiency in China. The overall evaluation of the service industry in China is given, and the main conclusions are as follows:(1) About province, Shanghai and Tibet achieve not only technical efficiency but' also scale efficiency. Obviously, it's positive correlation between efficiency of service industry and development of economy. The probable reasons of Tibet's efficiency are that tertiary industry is the main industry while primary industry and secondary industry are not developed, and the abundant traveling resources accelerate the development of Tibet's service industry. (2) About area, the efficiency of east area obviously excesses that of central and west area whose difference is rising, and the efficiency of central area is higher than that of west area whose difference is declining. The main reasons of the difference are geographical condition, policies, and so on. In order to accelerate structure optimization and improve technical efficiency of service industry, central and west areas should push market reform of service industry, enhance construction of infrustructure and social system, attract highly educated labor force, and inspire management and technical innovation.(3) In gerenal, there exists efficiency progress in 2005 but not high. Average technical efficiency is less than 0.9 during the 10 years because of low pure technical efficiency, which means the potential of resource and technology has not been mined along with the development of service industry. It will be helpful to accelerate development of China's service industry if we improve labor quality and enhance input efficiency due to prominent effect of scale economy in China's service industry.