EFFECT OF SUBSIDY POLICY ON TECHNICAL EFFICIENCY: AN EMPIRICAL STUDY OF CHINA'S URBAN PUBLIC TRANSPORTATION

摘要

This paper investigates the effect of China's subsidy policy on technical efficiency of urban public transport enterprises. Stochastic Frontier Approach (SFA) proposed by Battese and Coelli (1995) is applied and a translogarithmic production frontier model is estimated for a three-year panel of 400 urban public transport networks in China. The result shows that the subsidy policy was propitious to enhance the technical efficiency of public transport enterprises, but surplus subsidy could cause technical efficiency to reduce.