Technological change, technical and allocative efficiency in Chinese agriculture: the case of rice production in Jiangsu

Abstract

This paper develops a frontier shadow cost function approach to estimate empirically the effects of technological change, technical and allocative efficiency improvement in Chinese agriculture during the reform period . The results reveal that the first phase rural reforms which focused on the decentralization of the production system have had significant impact on technical efficiency but not allocative efficiency. During the second phase reforms which was supposed to focus on the liberalization of rural markets, technical efficiency improved very little and allocative efficiency has increased only slightly, however. In contrast, the rate of technological change continued to increase, although at a declining rate during the second phase reform.

Analysis of Factors Affecting the Allocative Efficiency of Maize Production: In Case of Nunu Kumba Woreda, East Wollega Zone

“…Production the theory states that under competitive conditions, the firm is said to be allocative efficient if it equates the marginal returns of factor inputs to the market price of the input (Fan, 1999). Allocative efficiency is also defined as measures of the distance between the farm and the point of maximum profitability, given market prices of inputs and outputs.…”

Community Property Auction, Nash Bidding Rule and China's Rural Economic Reform

“…China's achievements in terms of rural economic development has attracted considerable attention in the economics literature. The focus of study is typically the source of productivity gains in China's agriculture (McMillan et al, 1989;Fan 1991Fan , 2000Huang and Rozelle, 1996;Yao and Liu, 1998;Wang et al, 1996). Previous research centres on the disagreement about the relative importance of allocative efficiency versus technical efficiency gains, or the relative importance of structural reforms versus market reforms for China's rural economic development in the 1980s and 1990s.…”

“…The focus of study is typically the source of productivity gains in China's agriculture (McMillan et al. , 1989; Fan 1991, 2000; Huang and Rozelle, 1996; Yao and Liu, 1998; Wang et al. , 1996).…”

The sequencing of reform policies in China's agricultural transition*

“…Like Wen, however, they do not explicitly examine the improvements in efficiency that are associated with market development. Fan (2000) decomposes the efficiency gains of Jiangsu provincial rice producers in the late reform era and finds that there were only limited gains in allocative efficiency after 1984. Unfortunately, Fan's study is limited to only one crop in one province, which limits its generalization.…”

“…In evaluating the performance of specific aspects of transition, one particular difficulty appears to be in the measurement of the gains or losses due to market liberalization. While a number of studies have convincingly documented returns due to reforms that have provided producers with better incentives and increased decision‐making authority (for example, Lardy, 1983; McMillan, Whalley and Zhu, 1989; Lin, 1992; Pingali and Xuan, 1992; Macours and Swinnon, 2000), only a few authors have attempted to empirically isolate the effects of market liberalization on behaviour and performance throughout the reform period (for example Wen, 1993; Fan, 2000; Huang et al , 2000).…”