Evaluating Efficiency and Effectiveness of Logistics Infrastructure Based on PCA-DEA Approach in China

With the accession into the WTO, modern logistics in China possess the great development opportunity. Shanghai, Hong Kong and Guangzhou, some of the major gates to the outside world in China, plan to build themselves into major international logistics center in 5 to 10 years. Therefore the research of logistics infrastructure (LI) has recently become a hot topic in the logistics area. In this paper, we propose a principal component analysis (PCA) and data envelopment analysis (DEA) approach to evaluate efficiency and effectiveness of logistics infrastructure (EELI) for 31 major regions (including 23 provinces, 4 municipalities and 4 autonomous regions) in China. This model is significant because it not only can provide useful information to measure EELI through an evaluation framework including 2 output variables and 6 input variables, but also can help government identify the inefficient and effective operations.