Assessing the Innovation Efficiency of Chinese Domestic-funded Enterprises

The purpose of this research is to analyze the innovation efficiency of Chinese domestic-funded enterprises. Data envelopment analysis (DEA) and Malmquist index are used to evaluate innovation efficiency changes. CCR model is applied to measure technical innovation efficiency scores, radial movements, and slack movements. BCC model is extended to analyze the factors that contribute to technical innovation inefficiency. Based on data from the large- and medium-size industrial enterprises of different types of registration status, we find that the means of innovation efficiency of Chinese domestic-funded enterprises progressed except limited liability corporations and private enterprises during 2000-2008. Technical innovation inefficiency of cooperative enterprises and limited liability corporations was due to scale innovation inefficient in 2006-2008. Cooperative enterprises were on the increasing returns to scale portion, however, limited liability corporations were on the decreasing returns to scale portion during 2006-2008.