Changes in Scale and Technical Efficiency with Regional Transplantation Strategy
The study in this chapter aims to identify whether the differences of scale and technical efficiency exist among regions and to change the difference with regional transplantation strategy. Identification illustrates FDI path produces increasing technical efficiency and avoids the diminishing marginal returns in Eastern region, while both cases fail in Middle and Western regions. Decisions are realized through transplantation of Eastern technical efficiency into Middle and Western regions not only succeeds in producing output growth, but also keeps the production efficiency from decreasing. The transplantation of scale efficiency only succeeds in producing output growth while fails in reversing the declining trend of production efficiency.
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