DEA window analysis and Malmquist index to assess energy efficiency and productivity in Jordanian industrial sector

Abstract

This research evaluates the energy efficiency and productivity growth in the industrial sector over the period of 1999 till 2013 using data envelopment analysis (DEA). Two cases are analyzed; in the first case (GVA), the output is the gross value added, whereas two outputs are considered in the second case (GCO), CO2 emission and GVA. Five key input factors are considered in both cases. From DEA window analysis, the technical inefficiency (TIE) values are zeros in windows (2001–2005) till (2003–2007), (2007–2011), and (2008–2012), whereas the pure technical inefficiency (PTIE) values are zeros in windows (1999–2003) till (2003–2007). Finally, the scale inefficiency (SIE) values are zeros in windows (2001–2005) till (2003–2007). These results help policy planners on how to better utilize resources and management efficiency over time and guide operational managers when to increase or decrease the scale. Moreover, the averages of inefficiency values in the GVA case are smaller than their corresponding in the GCO case, which indicates the negative effect of CO2 emission on efficiency. Further, Malmquist index is estimated for three 5-year energy plans. The productivity index is found less than one for the third plan (2009–2013), which indicates a decrease productivity growth. In conclusions, research results provide valuable support when assessing the progress of energy efficiency and productivity in industrial sector.