Estimating technical efficiency of Chinese table grape wholesalers

Abstract

Purpose – The purpose of this paper is to estimate the technical efficiency of Chinese table grape wholesalers and subsequently to examine the degree to which the calculated efficiency correlates with a set of explanatory variables. Design/methodology/approach – A two-stage procedure is applied in this paper. First, a non-parametric data envelopment analysis (DEA) technique is applied to investigate the degree of technical efficiency for Chinese table grape wholesalers. Second, Tobit regression is used to analyze the factors influencing technical efficiency. Findings – Research results reveal that the mean technical efficiency of the sample is 0.544 and 0.860 under constant returns scale (CRS) and VRS assumptions, respectively, and the scale efficiency (SE) is 0.620. The variables of experiences, number of grape varieties on sale, daily selling volumes and fixed sale ratio have a significant effect on technical efficiency, while the other exogenous variables do not affect the efficiency in any significant way. Research limitations/implications – The findings of this research are specific to table grape wholesalers in China, however, the method used in this study is transferrable and applicable to the study of similar problems in others countries. Originality/value – This research has yielded some interesting and original insights into the efficiency level of Chinese grape wholesalers and the factors that influence the level of efficiency. The findings have practical implications for Chinese agriculture policy makers, and are able to stimulate further research of a similar type in the international agricultural research community.