Research On The Efficiency And Technology Evaluation Of Chinese Software Industry Based On Data Envelopment Analysis

Chinese software industry has become a basic and strategic industry which leads the development of Chinese economy and society. So how to promote its development efficiently becomes the common concern by policy-maker and related government officials.This paper adopts Data Envelopment Analysis (DEA) as the framework and analyzes the efficiency and technical progress of Chinese software industry. A 2-input and 3-output DEA model has been established, in order to evaluate the vertical and horizontal technical efficiency of software industry of 14 provinces or municipal cities.The horizontal efficiency evaluation is based on output-orientated DEA-C2R model and DEA-BC2 model. The data, which is from Chinese yearbook of electric and information technology industry (2009), has been progressed in these two models. The result is as follows:the software industry of Beijing, Shanghai and Fujian were efficient under both CRS and VRS technologies; Tianjin, Jilin and Guangdong were efficient under VRS technology but not efficient under CRS technology; the other provinces were neither efficient under CRS technology nor VRS technology. Then this paper also provides some suggestions on efficiency improvement by comparing the inefficient provinces and the efficient provinces which are used as benchmark.The vertical efficiency evaluation is on the basis of DEA-Malmquist model. The data of Chinese software industry from 2006 to 2009 is calculated in this model and several interesting conclusions have been achieved:during the period of 2006-2009, the total factor productivity (TFP) of Chinese software industry increased year by year. The mean of TFP surpassed 1 in 2009, which indicated that the technology of Chinese software industry progressed in that year. The average TFP of software industry of Beijing, Liaoning, Shanghai, Jiangsu is more than 1, which also indicated that the technology of these provinces'software industry progressed from 2006 to 2009. It is also demonstrated that the Capital's software industry grew best during this period, with best pure technical efficiency and optimal returns to scale. This paper also tries to explain the reason to cause the changes of TFP.