Analysis On Technical Efficiency Of Chinese Communication Equipment Manufacturing Enterprises Based On DEA

Since the1990s, Chinese communication equipment manufacturing industry has entered the"golden period" with rapid pace. After nearly20years of development, it has gradually become oneof the pillar industries of the national economy in China. However, the living environment ofcommunication equipment manufacturers is deteriorating. Excessive expansion of the size of theindustry leads to oversupply within the global market, prices dropping rapidly.Most enterprises’profits are very meager, whose survival and development are difficult. Therefore, it is particularlyimportant to understand the technical efficiency and its change of Chinese communicationequipment manufacturing enterprises, and to improve the technical efficiency and total factorproductivity, enhancing the operational capability and competitiveness.It is in such a context that the author studies the literature about efficiency of Chinese andforeign scholars firstly.Then he explains the DEA method, especially the derivation of Malmquistindex. Based on this, he builds a set of input-output system to measure and analyze the technicalefficiency and its change of31sample enterprises from2006to2011. The results show that: thetechnical efficiency of most Chinese communication equipment manufacturing enterprises ispassable; the technical efficiency, technological progress and TFP are average annually growing;but there is a certain degree of polarization. However, the scale efficiency is generally low. Thereexists a contradiction between "enterprise scale" and "industry scale" Based on this, the author givessome suggestions on how to improve the efficiency of Chinese communication equipmentmanufacturing enterprises, whose focus is to strengthen the industry consolidation, changing thestatus quo that there are too many poor enterprises in this industry.