A Stochastic Frontier Production Function Analysis of the Growth in China's Rural Enterprises

Using the balanced panel data of 29 provinces in China during 1990-2005 and the non-neutral technological progress stochastic frontier production function with inefficient item,this paper analyzes scale economy,technical efficiency and technological progress which influence the growth of China rural enterprises.The major findings include:During the development of rural enterprises,the output elasticity of capital has come closed to and even outstripped the output elasticity of labor;The whole scale economy of rural enterprises was a little bit bigger than 1,so expanding scale of operation would bring economy effects.The average technical efficiency of rural enterprises was rising while technological progress was reducing.On the basic of empirical study,this paper gives some suggestions to make China's rural enterprises realize sustainable development.