Input-output efficiency of environmental protection enterprises and its influencing factors: An empirical analysis of 279 listed enterprises in China

Abstract

The high quality of the environmental protection industry (EPI) plays an important role in China’s economic transformation. However, to date, no studies have conducted a comprehensive exploration of the factors that affect the input-output efficiency (IOE) of environmental protection enterprises (EPEs). Accordingly, this research uses the 2014 to 2018 unbalanced panel data of China’s EPEs listed on the Shanghai and Shenzhen Stock Exchanges and on the New Third Board as the research sample to measure the IOE of these enterprises under the framework of stochastic frontier analysis (SFA). This research also comprehensively examines various factors that affect efficiency. We found the following. (1) Although the improvement of the IOE of China’s EPEs superimposes the characteristics of market-driven and policy-driven efficiency drivers, there is negative feedback on fund-driven drivers. (2) The development of China’s EPI exhibits the characteristics of a blue ocean market, but efficiency enhancement must rely more on benign scale expansion and improvements in operations and management while simultaneously avoiding low-quality expansion. (3) As different types of influencing factors have obvious heterogeneous effects at the ownership, regional and segmented industry levels, to promote the improvement of the IOE of China’s EPEs, it is necessary to build a differentiated policy support system and assess its regulations and role in market leadership. At the same time, it is necessary to strengthen the supervision and control of blind expansion and increased leverage in certain areas.