Influence Of Economic Openness On Technical Efficiency In China

Since the reform and opening up, both in absolute size and from the world rankings, China’s international trade and foreign direct investment have made considerable progress, foreign economic openness correspondingly increasing rapidly.China pursues open economic policies, which aims not only to promote economic growth, but also to improve technology efficiency by factors of production and goods across borders.Could foreign economic liberalization improve China’s technical efficiency and to what extent? This question has aroused widespread concern in academic circles. Existing research has made a lot of progress in theoretical and empirical findings, but there are still some drawbacks, including: mostly only study a few economic impact or open mode; the lack of control variables; older data, and so on. In order to better overcome the argument because the argument omission in estimation error, the paper also studied comprehensively the Four Economic Openness- inward foreign direct investment, outward foreign direct investment dependence, import dependence and export dependence’s influence on China’s technology efficiency, and included human capital, R & D capital stock and regional dummy variables that may affect the technical efficiency.The main contents are as follows. First, a thorough combing the literature on inward foreign direct investment, outward foreign direct investment, import and export trade’s influence on technical efficiency, and summarizes research progress, identify shortcomings; then open the way for the Four Economic analysis of technical efficiency of the mechanism; Then create stochastic frontier model and the technical inefficiency model, based on the 29 provinces(mulicipalities, autonomous regions) 2003-- 2014 data, the use of software to measure Frontier4.1 provinces(mulicipalities, autonomous regions) technical efficiency and assess the impact of economic liberalization on technical efficiency effect. The main empirical results are as follows. First, our provincial and municipal levels of technical efficiency on the rise; second, there is a big difference in technical efficiency of the eastern, central, western, eastern higher than the central, central and western higher; Third, inward foreign direct investment and outward foreign direct investment plays an important role in promoting the technical efficiency, but export trade no significant effect on technology efficiency. Finally, this paper summarizes the main theoretical findings and puts forward relevant policy recommendations on how to take advantage of economic liberalization better and enhance technology efficiency of China’s provinces(mulicipalities, autonomous regions) faster.