Driving Factors for the Spatiotemporal Heterogeneity in Technical Efficiency of China’s New Energy Industry

Abstract

The new energy industry (NEI) is key to achieving a clean and low-carbon economy. Improving its technical efficiency, a factor reflecting the ability of an enterprise or industry to produce maximum economic outputs from a given set of inputs and production technologies, is vital for the healthy development of the NEI. Nevertheless, due to the fragmentation of industry data, it is still difficult to accurately measure the technical efficiency of China’s NEI and understand the driving factors behind it. Based on the panel data derived from 17,457 observations on new energy enterprises in 29 Chinese provinces during 1998 and 2013 (latest data available), this paper uses data envelopment analysis (DEA) and geographically and temporally weighted regression (GTWR) for the first time to investigate the spatiotemporal characteristics and driving factors of the technical efficiency of China’s NEI. The results show that the technical efficiency of China’s NEI was relatively low and increased modestly from 0.44 in 1998 to 0.52 in 2013. Exploring the reasons from the perspective of spatiotemporal heterogeneity, we find that enterprise scale and technological progress are the major driving factors for increasing NEI’s technical efficiency. However, the role of economic development in improving efficiency has gradually disappeared. Moreover, the negative effect of state-owned enterprises on efficiency becomes increasingly obvious. The effect of new energy resources is negligible. Our main contribution is the technical efficiency of China’s NEI which is measured at the provincial level and its main driving factors are explored by considering spatiotemporal heterogeneity. Accordingly, we put forward some specific recommendations to improve the technical efficiency of China’s NEI.