Efficiency and productivity of China’s outsourcing industry

Hongzhou Li, Min Yang and Yuki

Abstract

Based on a panel data set covering 17 provincial regions of China during the period from 2005 to 2011, this paper investigates the efficiency and productivity of China’soutsourcing industry, using super-DEA and DEA-Malmquist index method. Our results show that the average growth rate of total factor productivity is about 37% annually and the main source of that growth lies in technological progress, while diseconomy of scale impedes the growth rate of productivity of China’s outsourcing industry.