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The Analysis for the Scale and Efficiency of China¡¯s Major Automotive Enterprises Based on DEA Model

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  • Zheng Fei
  • Li L. Z

Abstract

This paper uses Data Envelopment Analysis (DEA) to measure the scale and efficiency of 28 major automotive enterprises in Chinese, and the results show that at this stage, large automobile manufacturers of China are under-produced and the production is too scattered, and the overall efficiency of automobile manufacturers is low. One of the main reasons is that because of the low technical efficiency value, the technological innovation capability of enterprises needs to be strengthened. The other reason is that the low efficiency of a large number of enterprises lowers the overall efficiency level. There is a positive correlation between the scale and efficiency of automobile manufacturers. Whether it is the horizontal comparison between different enterprises (nature) or the vertical comparison between the same enterprises, all show that compared with small-scale enterprises, large-scale manufacturing enterprises not only have higher scale efficiency but also have higher technical efficiency. With the expansion of production scale, the scale of enterprises and technical efficiency have improved, which shows that for the automotive industry, compared with other factors, economies of scale is the main factor that affects the automotive industry, and not only is it reflected in the scale but also in technological innovation. Therefore, when formulating policies, the relevant departments should support the development of large-scale enterprises, encourage mergers and acquisitions among enterprises, increase R&D investment, support technological innovation, and set up a scientific market exit mechanism to reduce exit costs, such as guiding the transformation of enterprises and establish a competition mechanism for the survival of the fittest.

Suggested Citation

  • Zheng Fei & Li L. Z, 2018. "The Analysis for the Scale and Efficiency of China¡¯s Major Automotive Enterprises Based on DEA Model," Journal of Mathematics Research, Canadian Center of Science and Education, vol. 10(2), pages 129-139, April.
    • Handle: RePEc:ibn:jmrjnl:v:10:y:2018:i:2:p:129
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    References listed on IDEAS

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    1. Banker, Rajiv D. & Thrall, R. M., 1992. "Estimation of returns to scale using data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 62(1), pages 74-84, October.
    2. Banker, Rajiv D., 1984. "Estimating most productive scale size using data envelopment analysis," European Journal of Operational Research, Elsevier, vol. 17(1), pages 35-44, July.
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    Cited by:

    1. Kovárník Richard & Staňková Michaela, 2023. "Assessing the Technical Efficiency of European Companies in the Automotive Sector," LOGI – Scientific Journal on Transport and Logistics, Sciendo, vol. 14(1), pages 251-262, January.
    2. Kovárník Richard & Staňková Michaela, 2023. "Efficiency of the Automotive Industry in the Visegrad Group," LOGI – Scientific Journal on Transport and Logistics, Sciendo, vol. 14(1), pages 12-23, January.

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    More about this item

    Keywords

    DEA; automotive enterprises; scale; technical efficiency; scale efficiency;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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