The Study On Technique Efficiency Of Listed Companies In Machinery And Equipment Manufacturing Industry Of China

Machinery and equipment manufacturing industry is the material basis of the nationaleconomy and social development. It can reflect one nation’s comprehensive strength. On theprocess of economic globalization, China is becoming the world manufacturing center, butcompared with the developed countries, there are big gap. The obsolete manufacturingtechnology and backward automation manufacturing technology widely exist in machinery andequipment manufacturing industry. In order to reduce the gap, the academic circles and theindustrial circles are in the unremitting exploration. Potter (1990) pointed out that the nationalproductivity was only meaningful concept of competition at the national level and was also so inthe region of significance. For an enterprise, productivity is the most important and the mostforemost part of competitiveness. The improved enterprise productivity can be manifested in twoaspects. On the one hand, the enterprise production boundary moves abroad, on the other hand,the distance from the enterprise actual output to the production boundary is shortened. There ismore emphasis on technological innovation, technological progress and management systemoptimization at the enterprise level.Technical efficiency closely links with the production possibility boundary, and it mainlyused to measure the distance from its output to the maximum output edge under the condition ofthe equivalent element investment. This paper argues that what the enterprise managementshould do is to base on improving the technical efficiency so that the actual operation stategradually close to its maximum potential and make full use of the creativity of existing capital.The business management layer can only improve the internal factors affecting the efficiency. Sothis article takes the internal factors of technical efficiency as a starting point, and focuses onanalysis of the relationship between capital structure and technical efficiency.Using the stochastic frontier analysis (SFA), this paper builds the stochastic frontierproduction function model basing on the Cobb-Douglas production function and uses the paneldata of listed company in China’s machinery and equipment manufacturing industry between2005and2009to review the technical efficiency of listed company and to analyze how thecapital structure influence on the company’s technical efficiency. The study has drawn someconclusions as follows: firstly the average technical efficiency of listed company in China’smachinery and equipment manufacturing industry was0.782, which need further upgrading and development. Secondly the average technical efficiency in China’s machinery and equipmentmanufacturing industry had an ascendant trend over time. Thirdly the China’s machinery andequipment manufacturing industry as a whole has not yet reached the scale efficiency. Thecapital structure and technical efficiency are in an inverted U type relation, namely there is anoptimal capital structure making the maximum enterprise technical efficiency. This providesreference for the enterprises in financing decision-making, but also offers a way to improve thetechnical efficiency in China’s machinery and equipment manufacturing industry.