Measuring the industrial performance of Chinese cities by data envelopment analysis

Abstract

The concept of allocative efficiency (AE) is discussed from the perspective of urban planning in China. The AE measurement is analytically achieved by data envelopment analysis/assurance region (DEA/AR) method. Using DEA/AR, this study illustrates the potential of AE to empirically measure the industrial performance of 35 selected Chinese cities. Besides the AE measurement, the current study explores the returns-to-scale (RTS) of these cities. The importance of the RTS measurement is that it does not assume uniqueness in its solution. This article thus presents an extended use of DEA in an attempt to improve the economic achievement within Chinese cities.