Economic openness and technical efficiency: q case study of Chinese manufacturing industries

This paper presents a study of the technical efficiency of industries in a transitional economy: China. Using data for 28 manufacturing industries across 29 provinces and the Data Envelopment Analysis approach, the technical efficiency of each industry is measured and compared across regions and provinces. The determinants of differential technical efficiency performance are analysed, with a particular focus on the impact of trade orientation and foreign investment. Trade openness is found generally to have a positive effect on technical efficiency.