Research on Environmental Total Factor Productivity Growth of China’s Industry

Abstract

This paper uses a panel dataset of China’s 30 provinces during the period of 1999-2012, and employs a slacks-based measure (SBM) and Luenberger Productivity Index to estimate China’s industrial environmental TFP growth and its components, accounting for CO2 emission as an undesirable output. The results show that the annual average growth rate of aggregate environmental TFP is 3.04%, that of Eastern China is 3.25%, while that of Middle of and Western China are 3.16% and 2.73%, respectively. It indicates that China’s economy is experiencing a transition from extensive to intensive and sustainable model, especially in Eastern China. However, the Middle and Western China are still suffering an unsustainable growth path.