An Empirical Analysis on Regional Technical Efficiency of Chinese Steel Sector based on Network DEA Method

Abstract This paper studies the regional technical efficiency of Chinese steel sector based on a network DEA model during the period of 2006-2010, which takes account of the real steel production process. Compared with the traditional DEA method, network DEA method has the advantages that it does not need model assumptions on input/output orientation and avoids the dilemma on the choice of input/output indicators. The comparison analysis shows that network DEA model produces more reasonable efficiency results than the traditional DEA model. The empirical results indicate a steady increase in technical efficiency of Chinese steel sector. In addition, the technical efficiency of Chinese industry sector in eastern area, central area and western area is unbalanced, with a lower efficiency in the west and a higher one in the east.