Efficiency impacts of the Chinese industrial transition: a quantitative evaluation of reforms in the coal industry

This paper explains the variation in technical efficiency across firms due to transitional reforms. A translog stochastic frontier production method incorporating regional heterogeneity and technical change is applied to a panel data set of coal enterprises in China between 2000 and 2005. The results provide evidence that the privatisation, consolidation, decentralisation and participation of the unemployment insurance system have contributed to improving technical efficiency. The study also shows that neither favourable geological conditions nor an advanced regional economic development level can explain differences in technical efficiency.