Environmentally sensitive productivity growth of industrial sectors in the Pearl River Delta

Abstract

Under the background of new urbanization, urban agglomeration plays an important role in boosting development in surrounding areas. However, while contributing significantly to economic growth, it was accompanied by high levels of energy consumption and emissions of waste gas and water into the surrounding ecological system. Therefore, it is worthwhile measuring the environmentally sensitive productivity changes during the development process. The Malmquist–Luenberger index based on company data for the period 2007–2012 is used to examine both desirable and undesirable outputs for total factor productivity of various industrial sectors in the Pearl River Delta. The trend in productivity growth and indexes in efficiency and technology are analyzed. We find that at the city scale, the industrial productivity levels in Dongguan, Shenzhen, and Zhongshan increased during the study period, while those in other cities decreased. Furthermore, Guangzhou, Dongguan, Foshan, Jiangmen, Shenzhen, and Zhuhai are green development cities. Technological advance was the main contributor to productivity growth. In accordance with the efficiency and technological change indexes, 225 Decision-Making Units (DMUs, refers to industrial sectors in this study) comprising specific industries from nine cities were classified into six categories. It was found that 66.9% of the DMUs developed with improved productivity and 40% developed in a green mode. Conditions and trends of industrial sectors and the key determinants affecting environmentally sensitive productivity growth was specified. Thus, it provides essential information for companies to develop in green way, as well as providing policy makers with an understanding of industrial development at both the city and sector level.