An Empirical Analysis on Impact of Foreign Direct Investment to Technical Efficiency of Service Industry in Heilongjiang Province

This paper applies Stochastic Frontier Analysis method to measure and analyze technical efficiency of service industry in Heilongjiang Province to conclude that on the term of longitudinal trend the technical efficiency of service industry in Heilongjiang Province from 1988 to 2008 increases gradually, but the growth rate was in a gradually decreasing trend; on the term of horizontal comparison, the technical efficiency levels of service industry in various regions of Heilongjiang province are quite different, which indicates the technical efficiencies are not even. At the same time, we investigate the relationship between technical efficiency of service industry and foreign direct investment, and find that the model established on the both reflects a significant negative correlation, but the negative impact is very limited. Finally, this paper puts forward several policy suggestions to improve technical efficiency of service industry in Heilongjiang province.