Evaluating the efficiency of industrial environmental regulation in China:A three-stage data envelopment analysis approach

Abstract

Abstract Environmental regulation is of great concern to international academics and policy makers. Previous studies often regarded environmental regulation as an influencing factor when calculating eco-efficiency or energy efficiency. More attention should be given to the efficiency of environmental regulation, especially in industrial field. According to exiting studies, industrial environmental regulation efficiency (IERE) may be influenced by external environmental factors, to explore the influence and obtain an actual efficiency, this paper calculated IERE in China by using the panel data of 30 regions from 2011 to 2015 (the 12th Five-Year Plan period) through the three-stage data envelopment analysis approach. Firstly, the Undesirable-slacks-based model method was used to calculate the original IERE. Secondly, the economic base, industrial structure, urbanization level, and education level were taken as external environmental variables, and the effect of external environmental factors and stochastic disturbance were excluded. Thirdly, the actual IERE can be calculated after adjusting input values. The results showed that China’s IERE was underestimated due to the impact from external environmental factors. Moreover, the IERE was more influenced by pure technical efficiency than scale efficiency. The IERE of each region varied, thus, targeted policies should be formulated according to local conditions. This research provided a new analytical method for calculating environmental regulation efficiency. The method can be applied either in other countries or in other sectors.