A Stochastic Frontier Approach to Assessing Total Factor Productivity Change in China’s Star-Rated Hotel Industry

Hongwei Liu, Henry Tsai

Research output: Journal article publicationJournal articleAcademic researchpeer-review

Abstract

Using a stochastic frontier analysis approach and a flexible translog production function considering neutral technological progress, this study assesses technical efficiency change, technological change, and scale change, and further measures the total factor productivity (TFP) change and its convergence of China’s star-rated hotel industry in 31 provinces, municipalities, and regions from 2001 to 2015. The results show that the TFP change of China’s star-rated hotel industry was generally favorable and boosted by both the technical efficiency change and technical change; nevertheless, the scale change hindered and largely caused fluctuations in the TFP change. From a regional economic perspective, the TFP change of the star-rated hotel industry in most of the eight comprehensive economic regions examined was rather stable. While few comprehensive economic regions existed absolute convergence, all of the regions showed significant conditional convergence except for the Eastern Coastal region.

Original languageEnglish
Pages (from-to)109-132
Number of pages24
JournalJournal of Hospitality and Tourism Research
Volume45
Issue number1
DOIs
Publication statusPublished - Jan 2021

Keywords

  • convergence analysis
  • efficiency
  • star-rated hotel
  • stochastic frontier analysis
  • total factor productivity change

ASJC Scopus subject areas

  • Education
  • Tourism, Leisure and Hospitality Management

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