Abstract
In this study, we analyze the environmental efficiency performance and its determinants of 29 manufacturing industries in China from 2006 to 2011 by employing a two-stage DEA (data envelopment analysis)-Tobit model. For providing comparative and robust evidence, the 29 manufacturing industries are classified into three groups based on the pollution intensity. In the first stage, a SBM (slacks-based measure)-DEA model is applied to assess economic efficiency and environmental efficiency scores to illustrate the effects of the environmental factors, while taking into consideration the undesirable output. In the second stage, utilizing these calculated environmental efficiency scores as dependent variables, we employ a Tobit regression model to study the determinants of the environmental efficiency by selecting three independent variables including the industry scale, the openness degree and the energy structure. It turns out that the environmental factors have a positive effect on the lightly polluted industries and a negative effect on the moderately polluted industries, the heavily polluted industries, and the overall industries, while the openness degree, the industry scale, and the energy structure can be effective measures to improve environmental efficiency. Based on these findings, we propose policy measures to enhance the environmental efficiency of manufacturing in China.
Highlights
In recent years, environmental problems have become a great challenge with the economic growth in China
By classifying China’s 29 manufacturing industries into lightly polluted, moderately polluted and heavily polluted industries according to the pollution intensity, we utilize a two-stage DEA-Tobit model to calculate the environmental efficiency and its determinants
By classifying 29 Chinese manufacturing industries into lightly polluted, moderately polluted and heavily polluted industries according to the pollution intensity, we utilize a two-stage DEA-Tobit model to analyze the environmental efficiency and its determinants
Summary
Environmental problems have become a great challenge with the economic growth in China. With 15.5% of global GDP in 2015, China has turned into the largest manufacturing power in the world. Accompanied with the high-speed development of manufacturing, China has paid enormous costs for energy over-consumption and serious environmental pollution. The environmental risk of manufacturing in China increases rapidly. In accordance with the investigation of the World Bank [1], China’s environmental cost is between 8% and 12% of GDP. This implies that the large cost of resources and energy has become one of the most serious problems of China’s sustainable development
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