Efficiency, Productivity and Regulation: China's Experience

Using Data Envelop Analysis (DEA) and Malmquist index methods, the technology efficiency and total factor productivity (TFP) of China's electric power sector between 1998 and 2007 were estimated. The effects of electricity regulation from the angle of efficiency compare and productivity change were evaluated too. The result shows that the efficiency of China's electric power industry has experienced a decline and rise process. The geographical location, business type, business nature and the regulation reform have made distinct affect on efficiency. TFP experienced a slow increase in ten years. The increase of technology efficiency explained all of the change of TFP. From the regulatory effect perspective, the regulation reform influenced technology efficiency and improved the efficiency of electrical enterprises. However, the electricity regulation reform didn't influence TFP apparently.