Productivity analysis of the telecommunications sector in China

Authors:
Pun-Lee Lam;Alice Shiu
Affiliations:
School of Accounting and Finance, M846, The Hong Kong Polytechnic University, Hong Kong Special Administrative Region, China;School of Accounting and Finance, M846, The Hong Kong Polytechnic University, Hong Kong Special Administrative Region, China
Venue:
Telecommunications Policy
Year:
2008

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Abstract

This paper applies the data envelopment analysis (DEA) approach to measure the productivity performance of China's telecommunications sector at the provincial level. The results indicate that the efficiency scores for different provinces and regions are diverse: the efficiency scores of the provinces in the eastern region are significantly higher than those in the central and western regions. The differences in efficiency scores are mainly due to the differences in the operating environments of different provinces, rather than the efficiency performance of telecommunications enterprises. The results also suggest that labour redundancy and excess capacity of long-distance optical cable lines are major problems in China's telecommunications sector. After a period of rapid growth in investment and number of subscribers, it is time for the telecommunications sector to consolidate and to put more emphasis on productivity growth in order to meet the challenges posed by the World Trade Organization (WTO) commitments.