Efficiency Of China Listed Steel Company

As a basic industry of the national economy, the iron and steel industry is animportant part of national economy, and symbol of development a country. Afterdecades of rapid development, China has become the most important world steelproducer. But China’s steel industry is still inefficient, irrational allocated. These issuesare hinder our country to become a real iron and steel power.This paper describes the achievements of China’s iron and steel industry firstly, andthen analysis the existing problems. China’s steel industry market structure is irrational,industry concentration is low; the capacity is too large, seriously excess; productstructure still need to upgrade as soon as possible. This paper attempts to use empiricalBayesian estimation method combining Data Envelopment Analysis and StochasticFrontier Analysis together, and then use the new method to measure the technicalefficiency of the iron and steel enterprises. And then we do empirical analysis.The results show that China’s steel industry is not efficient, but the trend of thetechnology gap between the enterprises are becoming smaller. Most of the iron and steelenterprises should control production scale, improve the management level, andupgrading of product structure. In addition to the technical efficiency, enterprisemanagement level, the degree of vertical integration and other factors have significantimpact on companies’ performance. The technical efficiency calculated from empiricalBayesian method is similar to the score from data envelopment analysis, and ranksunder the two methods are also very close.Based on the above research, we propose policy recommendations for theproblems of the steel industry. The state should control the expansion of productioncapacity, improve the industry geographic distribution and product structure and givefull play to the market adjustment mechanism. The iron and steel enterprises shouldself-disciplined, match production to market ability, and improve their managementlevel, increase investment in technology research and development. The steel companiesshould also actively develop overseas iron ore resources and speed up the constructionof steel logistics system.