TITLE:
Parametric Decomposition of the Malmquist Index in Output-Oriented Distance Function: Productivity in Chinese Agriculture
AUTHORS:
Bingxin Yu, Xiyuan Liao, Hongfang Shen
KEYWORDS:
Malmquist Index; Output Distance Function; Translog; Bias; Scale Efficiency; Chinese Agriculture
JOURNAL NAME:
Modern Economy,
Vol.5 No.1,
January
23,
2014
ABSTRACT: This paper decomposes the Malmquist productivity index into
several assembling components: technical change (further break down into
technical change magnitude, input bias and output bias), technical efficiency
change, scale efficiency change, and output-mix effect. A translog output
distance function is chosen to represent the production technology and each
component of the Malmquist index is computed using the estimated parameters.
This parametric approach allows us to statistically test the hypothesis
regarding different components of the Malmquist index and the natural of
production technology. The empirical application in Chinese agriculture shows
that the average productivity grows at 2 percent per year during 1978-2010.
This growth is mostly driven by technical change, which is found to be neutral.