Farm Technology and Technical Efficiency: Evidencefrom Four Regions in China

In this paper we fit stochastic frontier production functions to data for Chinese farmsgrouped into each of four regions—North, Northeast, East, and Southwest—over 1995-1999.These frontier production functions are shown to have statistically different structures, and themarginal product information shows overuse of chemical inputs in the East and capital servicesin the North. Labor also has a low marginal product. Next, we use the data and the productionparameters to create technical efficiency scores for each of the farms and then standardize them.Standardized technical efficiency is shown to have the same structure across regions and to berelated to the age of the farmer, land fragmentation, and the village migration rate, controlling foryear dummies and village or regional fixed effects.[...]