The Evaluation Of Chinese Regional Innovation Efficiency Based On Principal Component Analysis And Data Envelopment Analysis

In the 21st century,"building an innovation-oriented country"is becoming the core of national strategy in China. Because of the lack of technological innovation and scarcity of innovation resources, regional innovation efficiency (RIE) is increasingly crucial. As a result, the evaluation of RIE is an integral and important part of China's national strategy. However, among the literature at domestic and abroad, there are several shortcomings in both indicator system and estimation methods. This paper carries out a study, in response to the above issues to improve the evaluation indicator system, which can enrich and strengthen the methodology of RIE. At the same time, the basic conditions about RIE are taken into consideration, which can provide decision-makers with supports for policy development.Based on summarization and analysis of the research results both domestic and abroad, this paper selects a set of relatively consummate evaluation indicators, which include environmental variables into the innovation inputs for the first time. On the other hand, breaking through the output indicators being confined to technological or economic field, this paper reflects the innovation outputs from five aspects including scientific and technological achievements, economic, social and environmental performance, and regional competitiveness. Second, a combined method based on Principal Component Analysis (PCA) and Data Envelopment Analysis (DEA), is employed to overcome the constraints of traditional DEA. Furthermore, three criterias are proposed for DEA efficiency discrimination, and the efficiency measurements are compared.Based on the constructed indicator system and method, the paper estimates the innovation efficiency of 30 provinces in China. The empirical results with significant discrimination demonstrate that: Technical efficiency in China increases annually in time, and is higher in the east, lower toward the west. However, the gap between regions is gradually reduced; since the major bottleneck impeding technical efficiency is originated from pure technical efficiency, attention should be focused on nurturing innovation industries; Most provinces are in the phase of scale expansion, but they can not continue to expand; According to the level and direction of the output, the input investment are excessive in China, and the input investment structure is irrational.