Environmental regulations, environmental governance efficiency and the green transformation of China's iron and steel enterprises

Abstract

Based on micro-level enterprise panel data from 2005 to 2014, a slack-based global data envelopment analysis (DEA) model and a global Malmquist-Luenberger index model are used to calculate the environmental governance efficiency (EGE) of China's iron and steel enterprises (ISEs). Then, the different effects of two types of environmental regulation on EGE of China's ISEs are analysed. The results show that the overall level of EGE for China's ISEs has remained low over the past 10 years. The total factor environmental governance efficiency (TFEGE) presents a decreasing trend from 2005 to 2014, and the decline in TFEGE is mainly attributed to the technical progress change index (GTPCH). Moreover, the bootstrap DEA method is used for bias correction, and the correction efficiency values are all within the confidence interval, improving the accuracy of EGE evaluation. The regression analysis results show that different types of environmental regulations exert heterogeneous effects on TFEGE. The relationship between market incentive environmental regulation and TFEGE has an inverted U-shaped, implying that although market incentive environmental regulation may improve the TFEGE in the short term, continuously increasing this intensity would inhibit it. However, command control environmental regulation and TFEGE have a positive but not significant relationship.