Elasticity of Scale Output and TFP Estimation of Iron and Steel Industry

After estimating the transcendental logarithmic production function of iron and steel enterprises with method of Levinsohn-Petrin and calculating the elasticity of scale output and the total factor productivity, it is found that the scale profits had the tendency of increasing at first and decrease later by the enlargement of its scale. Currently, the large and medium-sized enterprises are at the range of profit decrease and their total factor productivity is higher than that of the small ones. During the structural reform of iron and steel industry supply, it is advisable to call out some small enterprises that have lagged behind through market system, and close down some large and medium-sized company to conduct technical revolution and reduce excessive capacity.