Assessment and Decomposition of Regional Land Use Efficiency of the Service Sector in China

Abstract

High land use efficiency is the key to improving total factor productivity, and also an important force behind achieving sustained economic growth. Existing studies have mainly focused on the land use efficiency of the industry sector. Yet, the issue of land use efficiency of the service sector (SLUE) has been largely overlooked. This study examines regional differences and efficiency decomposition by using a slack based model (SBM) of undesirable output, and the Malmquist productivity index (MPI) under a data envelopment analysis framework. The results reveal that: (1) In China, the land use efficiency of the service sector is unbalanced, showing an inverted growth law of “low in developed areas and high in backward areas”. (2) The land use efficiency of the service sector can be decomposed into technical progress, pure technical efficiency, and scale efficiency. From the decomposition results, the growth rate of pure technical efficiency presents a trend of “low in the east and high in the west”; the scale efficiency also falls into the situation of weak group growth. Technological progress has maintained steady improvement. (3) The coordinated improvement of land use efficiency of the service sector needs to focus on resolving the “beggar-thy-neighbor” issue caused by existing large regional differences. In this article, the puzzle of land use efficiency differences in the service industry is well solved, and thus provides valuable enlightenment for the benign growth of service industries in countries and regions around the world.