Technology Progress, Technical Efficiency and the Growth of China’s Rural Enterprises——Based on the Framework of Stochastic Frontier Production Function

Using the balanced panel data of 29 provinces in China during 1990-2005 and the non-neutral technology progress stochastic frontier production function with inefficient item, this paper analyzes scale economy, technical efficiency and technology progress 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 technology progress was reducing. At last this paper gives some suggestions to make China’s Rural Enterprises realize sustainable development.