Research On Efficiency Of Pharmaceutical Listed Company In China Based On SFA Model

The pharmaceutical industry is an important industry which is related to the nationaleconomy. It is also a major field of strategic emerging industries, having a special position in thenational economy. To evaluate the efficiency of the listed companies in the pharmaceuticalindustry is of great importance both for its investors, managers and government departments.Through reading and combing the literature, the article concluded that the stochastic frontieranalysis method has advantages compared to data envelopment analysis method. Thus, the articleinnovatively uses three different models of SFA to measure the efficiency value and efficiencyrank of the85listed companies on the pharmaceutical industry in2005-2011. The result showsthat the overall efficiency of the Chinese pharmaceutical listed companies has an upward trend,that the efficiency differences between different pharmaceutical companies continue to shrinkand that the level of efficiency grows steadily in the gradual convergence. Then, the articleconducts a consistency test on the empirical findings of three models. The result of the testshows that the efficiency rank passes the consistency test, while the efficiency values aresignificantly different.Based on the above empirical results, this article analyzes the influence factors of theefficiency differences between different pharmaceutical companies, including R&D intensity,firm size, ownership concentration and nature of property rights, etc. The empirical results showthat: R&D intensity can promote the efficiency of the pharmaceutical companies. Meanwhile,firm size and ownership concentration are conducive to the improvement of the efficiency ofpharmaceutical companies. However, the change of the firm size has small influence on theefficiency of the pharmaceutical companies while the influence of the ownership concentrationon which is even small. Besides, there is no significant relationship between the pharmaceuticalcompanies’ property nature and their efficiencies. That is, the differences of the nature ofproperty rights will not result in the difference between the efficiency of the pharmaceuticalcompanies. The efficiency of the state-owned nature pharmaceutical companies is not necessarilylower than that of the non-state-owned pharmaceutical companies.