Empirical Studies Of Total Factor Productivity Of China’s Fossil Energy Processing Industry

As the world’s second-largest economy, the economic development ofChina is largely supported by industrial development, which cannot be separated fromoil and coal that is known as the “industrial blood” and “industrial food”. Around90%of the coal and oil, which accounting for China’s total primary energy supply,promotes China’s economic development and holds a significant position in theprocess of country’s industrialization. Consequently, as the subsequent processing ofprimary energy, fossil energy processing industry engaged in petroleum processingand coking is an essential boosters which can help China to achieve full realization ofindustrialization and realize steady economic growth. However, the truth is China’sfossil energy processing industry has a poor organization, inefficient production,backward production technology, environmental pollution and serious waste ofresources for a long time, causing some fetters on the further development of China’seconomy. Therefore, it is profound to conduct an in-depth study of the China’s fossilenergy processing industry, and to carry on an analysis of this industry’s developmentas well as its production efficiency.The thesis considers the output of the fossil energy processing industry, investedpanel data of China’s29provinces in2001-2010(municipalities and autonomousregions, Tibet, Qinghai, Ningxia are excluded), and also uses the TranscendentalLogarithmic stochastic Frontiers model based on the Cobb-Douglas productionfunction to estimate technical efficiency change, the total factor productivity and totalfactor productivity growth of this industry in China within the time span. Finally, thepaper explores some policies to improve total factor productivity in China’s fossilenergy processing industry.The results of study of technical efficiency of fossil energy processing industryin China showed that there are significant efficiency losses in this industry during2001to2010, and the extent of the loss of efficiency is widening. So the efficiency of this industry could be improved further. At the same time, there are also some obviousdifferences in the level of technical efficiency and the degree of change in our29provinces. Combined with China’s fossil energy processing industry analysis, it isconcluded that the level of technical efficiency and changes in the magnitude areclosely related to the location factors, the industrial base and the level of scientificresearch. The adjustment measures to improve the efficiency of this industrialtechnology should start from these aspects.The research of the total factor productivity of China’s fossil energy processingshows that the industry’s total factor productivity is in a state of fluctuations in growth,and the average growth rate is0.169. Meanwhile there are some significant regionaldifferences in the data. It is believed that the China’s fossil energy processingindustry is largely influenced by the degree of opening up, the level of modernfinancial services industry, science and education investment, and government policythrough the research analysis. This conclusion is also pointed out the direction toimprove the level of total factor productivity of China’s fossil energy processingindustry.