Efficiency measurement of industrial development zones by Stochastic Frontier Analysis

Effective industrial development zones should have their own features to be extended. Efficiency can be measured by input and output. The areas of district, investment capital, and total employment were viewed as input variables. Profit and gross production were considered as output ones. Technical efficiencies of fifteen parks in Inner Mongolia were measured by Stochastic Frontier Analysis (SFA). Cobb Douglas cost function was used. The SFA models that were used were the error component mode. The results showed that the Otog, Munsey and Baotou zones had the highest efficiency. Their management modes could be concluded and learned from other zones.