An analysis of industrial labor productivity based on DEA in China

Based on frontier production surface of DEA, authors decompose index of labor productivity into technical efficiency, pure technical progress, scale efficiency of capital/labor and change of intensity for capital/labor, and analyze the economic meanings of the four indexes. Then the paper proposes the effect of the four indexes to provincial industrial labor productivity during 2004 and 2005 in China. We get some results: (1) the improvement of industrial labor productivity mainly came from technical progress and capital deepening; (2) most of provinces that once lied in the state of decreasing return to scale efficiency of capital/labor.