IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v11y2019i23p6804-d292612.html
   My bibliography  Save this article

Evaluating Economic and Environmental Performance of the Chinese Industry Sector

Author

Listed:
  • Yongzhong Jiang

    (College of Management Science, Chengdu University of Technology, Chengdu 610059, China
    Department of Economics, University of Kansas, Lawrence, KS 66045, USA)

  • Xueli Chen

    (Chinese Academy of Social Sciences, Beijing 100732, China)

  • Vivian Valdmanis

    (Program in Public Health, Western Michigan University, Grand Rapids, MI 49503, USA)

  • Tomas Baležentis

    (Faculty of Economics and Business Administration, Vilnius University, 10222 Vilnius, Lithuania)

Abstract

This study assesses economic and environmental performance in the Chinese industry sector across 30 provinces during the period of 2006–2017. The study relies on a nonparametric framework and we apply a novel decomposition of the overall inefficiency scores into three components of technical, scale and mix inefficiency at the aggregate level by incorporating undesirable outputs. As we rely on by-production technology, industry performance is split into economic and environmental dimensions. Our results show that Chinese industry inefficiency is equally due to economic and environmental performance during 2006–2017, whereas technical and scale inefficiencies are relatively higher for environmental sub-technology (which relates energy to CO 2 emission) if opposed to the economic sub-technology (which relates all the inputs to the economic value added). This implies that Chinese industry still requires improvements in environmental performance. The eastern region shows a relatively low average economic overall inefficiency if compared to other regions, yet its total OI (overall inefficiency) is the highest among the regions. Thus, environmental performance and misallocation of resources constitute the underlying causes of the total inefficiency. Therefore, structural reforms are necessary besides improvements in the production processes in the eastern region. This is important since China has experienced economic growth, but also policy must pay attention to environmental issues and sustainability.

Suggested Citation

  • Yongzhong Jiang & Xueli Chen & Vivian Valdmanis & Tomas Baležentis, 2019. "Evaluating Economic and Environmental Performance of the Chinese Industry Sector," Sustainability, MDPI, vol. 11(23), pages 1-17, November.
    • Handle: RePEc:gam:jsusta:v:11:y:2019:i:23:p:6804-:d:292612
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/11/23/6804/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/11/23/6804/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Wang, Ke & Lu, Bin & Wei, Yi-Ming, 2013. "China’s regional energy and environmental efficiency: A Range-Adjusted Measure based analysis," Applied Energy, Elsevier, vol. 112(C), pages 1403-1415.
    2. Shen, Zhiyang & Boussemart, Jean-Philippe & Leleu, Hervé, 2017. "Aggregate green productivity growth in OECD’s countries," International Journal of Production Economics, Elsevier, vol. 189(C), pages 30-39.
    3. Färe, Rolf & Grosskopf, Shawna & Pasurka, Carl A., 2007. "Environmental production functions and environmental directional distance functions," Energy, Elsevier, vol. 32(7), pages 1055-1066.
    4. Toshiyuki Sueyoshi & Yan Yuan & Aijun Li & Daoping Wang, 2017. "Social Sustainability of Provinces in China: A Data Envelopment Analysis (DEA) Window Analysis under the Concepts of Natural and Managerial Disposability," Sustainability, MDPI, vol. 9(11), pages 1-18, November.
    5. Du, Juan & Chen, Yao & Huang, Ying, 2018. "A Modified Malmquist-Luenberger Productivity Index: Assessing Environmental Productivity Performance in China," European Journal of Operational Research, Elsevier, vol. 269(1), pages 171-187.
    6. Gary Ferrier & Hervé Leleu & Vivian Valdmanis, 2010. "The impact of CON regulation on hospital efficiency," Health Care Management Science, Springer, vol. 13(1), pages 84-100, March.
    7. Zhang, Ning & Wang, Bing & Liu, Zhu, 2016. "Carbon emissions dynamics, efficiency gains, and technological innovation in China's industrial sectors," Energy, Elsevier, vol. 99(C), pages 10-19.
    8. Wu, Ya & Su, JingRong & Li, Ke & Sun, Chuanwang, 2019. "Comparative study on power efficiency of China's provincial steel industry and its influencing factors," Energy, Elsevier, vol. 175(C), pages 1009-1020.
    9. Yang, Hongliang & Pollitt, Michael, 2009. "Incorporating both undesirable outputs and uncontrollable variables into DEA: The performance of Chinese coal-fired power plants," European Journal of Operational Research, Elsevier, vol. 197(3), pages 1095-1105, September.
    10. Wu, Jie & Li, Mingjun & Zhu, Qingyuan & Zhou, Zhixiang & Liang, Liang, 2019. "Energy and environmental efficiency measurement of China's industrial sectors: A DEA model with non-homogeneous inputs and outputs," Energy Economics, Elsevier, vol. 78(C), pages 468-480.
    11. Feng, Chao & Wang, Miao, 2018. "Analysis of energy efficiency in China's transportation sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 94(C), pages 565-575.
    12. Wang, Ke & Wei, Yi-Ming & Zhang, Xian, 2013. "Energy and emissions efficiency patterns of Chinese regions: A multi-directional efficiency analysis," Applied Energy, Elsevier, vol. 104(C), pages 105-116.
    13. Shen, Zhiyang & Baležentis, Tomas & Chen, Xueli & Valdmanis, Vivian, 2018. "Green growth and structural change in Chinese agricultural sector during 1997–2014," China Economic Review, Elsevier, vol. 51(C), pages 83-96.
    14. Li, Sung-Ko, 1995. "Relations between convexity and homogeneity in multioutput technologies," Journal of Mathematical Economics, Elsevier, vol. 24(4), pages 311-318.
    15. Song, Malin & Fisher, Ron & Kwoh, Yusen, 2019. "Technological challenges of green innovation and sustainable resource management with large scale data," Technological Forecasting and Social Change, Elsevier, vol. 144(C), pages 361-368.
    16. Lam, Pun-Lee & Shiu, Alice, 2001. "A data envelopment analysis of the efficiency of China's thermal power generation," Utilities Policy, Elsevier, vol. 10(2), pages 75-83, June.
    17. Wu, F. & Fan, L.W. & Zhou, P. & Zhou, D.Q., 2012. "Industrial energy efficiency with CO2 emissions in China: A nonparametric analysis," Energy Policy, Elsevier, vol. 49(C), pages 164-172.
    18. Sueyoshi, Toshiyuki & Yuan, Yan & Goto, Mika, 2017. "A literature study for DEA applied to energy and environment," Energy Economics, Elsevier, vol. 62(C), pages 104-124.
    19. Wu, Jie & Zhu, Qingyuan & Liang, Liang, 2016. "CO2 emissions and energy intensity reduction allocation over provincial industrial sectors in China," Applied Energy, Elsevier, vol. 166(C), pages 282-291.
    20. Chambers, Robert G. & Chung, Yangho & Fare, Rolf, 1996. "Benefit and Distance Functions," Journal of Economic Theory, Elsevier, vol. 70(2), pages 407-419, August.
    21. Tao Zhang, 2008. "Environmental performance in China's agricultural sector: a case study in corn production," Applied Economics Letters, Taylor & Francis Journals, vol. 15(8), pages 641-645.
    22. Boussemart, Jean Philippe & Leleu, Hervé & Shen, Zhiyang, 2015. "Environmental growth convergence among Chinese regions," China Economic Review, Elsevier, vol. 34(C), pages 1-18.
    23. Aizhen Zhang & Aijun Li & Yaping Gao, 2018. "Social Sustainability Assessment across Provinces in China: An Analysis of Combining Intermediate Approach with Data Envelopment Analysis (DEA) Window Analysis," Sustainability, MDPI, vol. 10(3), pages 1-24, March.
    24. Murty, Sushama & Robert Russell, R. & Levkoff, Steven B., 2012. "On modeling pollution-generating technologies," Journal of Environmental Economics and Management, Elsevier, vol. 64(1), pages 117-135.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Song, Wenfei & Han, Xianfeng, 2022. "The bilateral effects of foreign direct investment on green innovation efficiency: Evidence from 30 Chinese provinces," Energy, Elsevier, vol. 261(PB).
    2. Caiming Wang & Jian Li, 2020. "The Evaluation and Promotion Path of Green Innovation Performance in Chinese Pollution-Intensive Industry," Sustainability, MDPI, vol. 12(10), pages 1-22, May.
    3. Hongwei Liu & Ronglu Yang & Zhixiang Zhou & Dacheng Huang, 2020. "Regional Green Eco-Efficiency in China: Considering Energy Saving, Pollution Treatment, and External Environmental Heterogeneity," Sustainability, MDPI, vol. 12(17), pages 1-19, August.
    4. Xingyuan Wang, 2022. "Research on the impact mechanism of green finance on the green innovation performance of China's manufacturing industry," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(7), pages 2678-2703, October.
    5. Rui Wang & Bing Xia & Suocheng Dong & Yu Li & Zehong Li & Duoxun Ba & Wenbiao Zhang, 2020. "Research on the Spatial Differentiation and Driving Forces of Eco-Efficiency of Regional Tourism in China," Sustainability, MDPI, vol. 13(1), pages 1-23, December.
    6. Xiyue Zhang & Fangcheng Sun & Huaizu Wang & Yi Qu, 2020. "Green Biased Technical Change in Terms of Industrial Water Resources in China’s Yangtze River Economic Belt," IJERPH, MDPI, vol. 17(8), pages 1-20, April.
    7. Wenyin Cheng & Zhusong Yang & Xia Pan & Tomas Baležentis & Xueli Chen, 2020. "Evolution of Carbon Shadow Prices in China’s Industrial Sector during 2003–2017: A By-Production Approach," Sustainability, MDPI, vol. 12(2), pages 1-14, January.
    8. Zhong Fang & Hua Bai & Yuriy Bilan, 2019. "Evaluation Research of Green Innovation Efficiency in China’s Heavy Polluting Industries," Sustainability, MDPI, vol. 12(1), pages 1-21, December.
    9. Mateusz Trzeciak & Izabela Jonek-Kowalska, 2021. "Monitoring and Control in Program Management as Effectiveness Drivers in Polish Energy Sector. Diagnosis and Directions of Improvement," Energies, MDPI, vol. 14(15), pages 1-25, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Shen, Zhiyang & Baležentis, Tomas & Chen, Xueli & Valdmanis, Vivian, 2018. "Green growth and structural change in Chinese agricultural sector during 1997–2014," China Economic Review, Elsevier, vol. 51(C), pages 83-96.
    2. Sueyoshi, Toshiyuki & Yuan, Yan & Goto, Mika, 2017. "A literature study for DEA applied to energy and environment," Energy Economics, Elsevier, vol. 62(C), pages 104-124.
    3. Lin, Boqiang & Bai, Rui, 2020. "Dynamic energy performance evaluation of Chinese textile industry," Energy, Elsevier, vol. 199(C).
    4. Li, Aijun & Zhang, Aizhen & Huang, Huijie & Yao, Xin, 2018. "Measuring unified efficiency of fossil fuel power plants across provinces in China: An analysis based on non-radial directional distance functions," Energy, Elsevier, vol. 152(C), pages 549-561.
    5. Wenyin Cheng & Zhusong Yang & Xia Pan & Tomas Baležentis & Xueli Chen, 2020. "Evolution of Carbon Shadow Prices in China’s Industrial Sector during 2003–2017: A By-Production Approach," Sustainability, MDPI, vol. 12(2), pages 1-14, January.
    6. Du, Kerui & Lu, Huang & Yu, Kun, 2014. "Sources of the potential CO2 emission reduction in China: A nonparametric metafrontier approach," Applied Energy, Elsevier, vol. 115(C), pages 491-501.
    7. Pham, Manh D. & Zelenyuk, Valentin, 2019. "Weak disposability in nonparametric production analysis: A new taxonomy of reference technology sets," European Journal of Operational Research, Elsevier, vol. 274(1), pages 186-198.
    8. Jean-Philippe Boussemart & Hervé Leleu & Zhiyang Shen & Vivian Valdmanis, 2020. "Performance analysis for three pillars of sustainability," Journal of Productivity Analysis, Springer, vol. 53(3), pages 305-320, June.
    9. Jayanath Ananda & Dong-hyun Oh, 2023. "Assessing environmentally sensitive productivity growth: incorporating externalities and heterogeneity into water sector evaluations," Journal of Productivity Analysis, Springer, vol. 59(1), pages 45-60, February.
    10. Ke Wang & Yujiao Xian & Chia-Yen Lee & Yi-Ming Wei & Zhimin Huang, 2019. "On selecting directions for directional distance functions in a non-parametric framework: a review," Annals of Operations Research, Springer, vol. 278(1), pages 43-76, July.
    11. Wang, Ke & Wei, Yi-Ming & Huang, Zhimin, 2018. "Environmental efficiency and abatement efficiency measurements of China's thermal power industry: A data envelopment analysis based materials balance approach," European Journal of Operational Research, Elsevier, vol. 269(1), pages 35-50.
    12. Zhiyang Shen & Vivian Valdmanis, 2020. "Identifying the contribution to hospital performance among Chinese regions by an aggregate directional distance function," Health Care Management Science, Springer, vol. 23(1), pages 142-152, March.
    13. Wang, Ke & Wei, Yi-Ming, 2014. "China’s regional industrial energy efficiency and carbon emissions abatement costs," Applied Energy, Elsevier, vol. 130(C), pages 617-631.
    14. Du, Juan & Chen, Yao & Huang, Ying, 2018. "A Modified Malmquist-Luenberger Productivity Index: Assessing Environmental Productivity Performance in China," European Journal of Operational Research, Elsevier, vol. 269(1), pages 171-187.
    15. Lin, Boqiang & Du, Kerui, 2015. "Energy and CO2 emissions performance in China's regional economies: Do market-oriented reforms matter?," Energy Policy, Elsevier, vol. 78(C), pages 113-124.
    16. Arnaud Abad, 2020. "Environmental Efficiency and Productivity Analysis," Working Papers hal-03032038, HAL.
    17. Zhang, Ning & Kong, Fanbin & Choi, Yongrok & Zhou, P., 2014. "The effect of size-control policy on unified energy and carbon efficiency for Chinese fossil fuel power plants," Energy Policy, Elsevier, vol. 70(C), pages 193-200.
    18. Du, Huibin & Matisoff, Daniel C. & Wang, Yangyang & Liu, Xi, 2016. "Understanding drivers of energy efficiency changes in China," Applied Energy, Elsevier, vol. 184(C), pages 1196-1206.
    19. Wang, Ke & Wei, Yi-Ming, 2016. "Sources of energy productivity change in China during 1997–2012: A decomposition analysis based on the Luenberger productivity indicator," Energy Economics, Elsevier, vol. 54(C), pages 50-59.
    20. Ke Wang & Yi-Ming Wei & Zhimin Huang, 2017. "Environmental efficiency and abatement efficiency measurements of China¡¯s thermal power industry: A data envelopment analysis based materials balance approach," CEEP-BIT Working Papers 108, Center for Energy and Environmental Policy Research (CEEP), Beijing Institute of Technology.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:11:y:2019:i:23:p:6804-:d:292612. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.