Meta-frontier Data Envelopment Analysis Approach Research Articles

Does financial inclusion improve energy efficiency?

This paper extends the empirical debate on the effects of financial inclusion on energy efficiency. We employ a non-convex metafrontier data envelopment analysis approach to estimate energy efficiency, and examine the impacts of financial inclusion on energy efficiency using a dataset of China's 251 prefecture-level cities during 2011–2015. Our results document that financial inclusion significantly improved energy efficiency. Specifically, a unit increase in financial inclusion would lead to an increase in energy efficiency by approximately 6.5 %. To address the endogeneity, we introduce two instrumental variables into our baseline model. Estimates of two stage least squares also support our main findings. Moreover, we find that marketization is one of the primary channels for financial inclusion to improve energy efficiency. These findings are robust across estimation method, model specifications and alternative measures of both financial inclusion and energy efficiency. Policy implications are presented based on the empirical results.

Route-based performance evaluation for airlines – A metafrontier data envelopment analysis approach

The international aviation industry is essential for both passengers and commodities. Previous literature tends to evaluate aviation performance from the perspective of airlines or airports. However, each route faces a different operating environment and thus has a different profit portfolio. Therefore, a route-based performance evaluation can better reflect the range of operating characteristics by considering the differing characteristics of routes. This study conducted an empirical analysis of 112 international routes from two Taiwanese airlines. To first identify the key variables that have a significant impact on airline performance, a systematic literature review was conducted using a meta-analysis approach. This study then used those key variables to measure route-based performance with data envelopment analysis (DEA) modeling. Finally, k-medoids cluster analysis was used to explore successful factors for air route performance as complementary research to the DEA modeling. Model results show three groups of routes can be clearly identified by considering route efficiency. Each group has very distinct route characteristics (e.g., Asian routes vs US routes) and some route planning recommendations can be developed. The results of this study can help operators and policy makers improve operating performance and identify key factors for route development and planning.

Research efficiency analysis of China's university faculty members: A modified meta-frontier DEA approach

Traditionally, data envelopment analysis (DEA) requires all decision-making units (DMUs) to have similar characteristics and experiences within the same external conditions. In many cases, this assumption fails to hold, and thus, difficulties will be encountered to some extent when measuring efficiency with a standard DEA model. Ideally, the performance of DMUs with different characteristics could be examined using the DEA meta-frontier framework. However, some of these DMUs are mixed-type DMUs that may affiliate with more than one group. Furthermore, the total number of observations of these mixed-type DMUs is limited. This is one of the common problems when studies focus on faculty research performance in higher education institutions. In general, a faculty member is affiliated with a certain department, and if the departmental assessment policy is not suitable for faculty members who are involved in interdisciplinary research, their performance could be underestimated. Therefore, the proposed model is an extension of the DEA meta-frontier framework that can assess the performance of mixed-type DMUs by constructing the reference set without the same type of DMUs. In this paper, the scientific research efficiency of faculty members at the Inner Mongolia University is used as an example to provide a better understanding of the proposed model. The proposed model is intended to provide a fair and balanced performance assessment method that reflects actual performance, especially for mixed-type DMUs.

Measuring European cultural and creative cities efficiency: a metafrontier DEA approach

PurposeThe purpose of this paper is to conduct a benchmark analysis of European cities based on the estimation of a composite index of efficiency from the dimensions of the Cultural and Creative Cities Monitor 2017 (CCCM). The study helps to initiate a new exploration path based on this information, using a segmentation criterion of countries according to their economic and demographic characteristics, in search of greater comparative homogeneity.Design/methodology/approachIn this paper, the metafrontier methodological proposal with data envelopment analysis (DEA) has been used to compare the groups of cities individually with their joint reference.FindingsThe results obtained indicate, from a greater control of heterogeneity, through the segmentation of the sample of cities and the metafrontier methodology, that the composite index (IEC3) through the enveloping data analysis methodology (DEA) is more robust than that obtained with the arbitrary assignment of CCCM weights. The analyses carried out make it possible to study and conduct more real and rigorous comparisons of the cities that experience the best practices, unlike other more distant ones. Reference to cities such as Paris, Louvain and Cork could serve as a basis for possible improvements.Originality/valueIt is important to bear in mind that the possible urban policies of a city and the creative strategies and their derived impact are different, because of the diversity in each city. These new comparability possibilities could serve as a tool for economic policy makers, companies and local managers to carry out learning and simulation processes in the improvement of creative cities.

CO2 emissions performance and reduction potential in China’s manufacturing industry: A multi-hierarchy meta-frontier approach

Excessive CO2 emissions from manufacturing has become a major factor that constrains China’s sustainable economic development. Therefore, considering the regional and industrial heterogeneities, this paper introduces a global multi-hierarchy meta-frontier Data Envelopment Analysis approach to analyze the dynamic performance of CO2 emissions and to estimate the current CO2 emissions inefficiency and reduction potential in the manufacturing industry of China’s 30 provinces, which are separated into three components, namely, structural characteristics, technology gaps, and resource allocation levels. The results show that: (1) From 2003 to 2015, the CO2 emissions efficiency of China’s manufacturing industry increased by a factor of 4.7, of which technological progress and optimization of industrial structure were the main driving forces. (2) At present, the CO2 emissions inefficiency of the manufacturing industry in mainland China is 0.7804, reflecting that 78.04% of its total CO2 emissions is excessive emissions, which is mainly caused by the low allocation efficiency. (3) The heavy sub-industry and the east region have the greatest potential for CO2 emissions reduction in the manufacturing and in the three regions of the country, respectively. In addition, by promoting the industrial restructuring, regional coordinated development, and strengthening the environmental regulations and promoting market-oriented reforms, China’s manufacturing industry could reduce 29.65%, 11.55% and 36.84%, respectively, of its current CO2 emissions. Based on the estimation results, this paper also points out the short-term and long-term directions for industrial structure adjustment and develops the specific paths for China’s 30 provinces to achieve CO2 emissions reduction in manufacturing industry.

Analysis of the environmental efficiency in China based on the DEA cross‐efficiency approach under different policy objectives

AbstractThe existing studies on environmental efficiency evaluation generally have the problem of efficiency overestimation. To solve this problem, a new data envelopment analysis (DEA) cross‐efficiency approach with undesirable outputs is developed to evaluate environmental efficiency from the perspectives of both self‐evaluation and peer evaluation. Then, three new evaluation strategies, namely, economic development strategy, environmental protection strategy, and win–win strategy, are proposed to reflect the needs of decision makers under different policy objectives. The proposed cross‐efficiency approach with different evaluation strategies not only realizes the cross evaluation of environmental efficiency, but also guarantees the relative uniqueness of the optimal solution on the basis of the preferences of decision makers. Combining the metafrontier DEA approach and DEA window analysis, a new cross‐efficiency analytical framework is constructed to gradually analyse the influences of policy objectives, technology heterogeneity, and dynamic correlation on the environmental efficiency. Subsequently, the environmental efficiency of China's economic development during 2006–2015 is in‐depth analysed on the basis of the proposed analytical framework, and some interesting conclusions, and some useful suggestions are obtained.

Technology heterogeneity and efficiency of China’s circular economic systems: A game meta-frontier DEA approach

China is vigorously developing a circular economy to alleviate environmental degradation and resource shortages. In a circular economic system, resource recovery and pollutant treatment are core subsystems. To improve resource utilization efficiencies and reduce pollutant emissions in the circular economic system, this study first proposes a comprehensive model using game theory and a data envelopment analysis (DEA) method. Then, to identify the technology gaps between circular economic systems, the study proposes a game meta-frontier DEA model. The proposed models are then applied to evaluate the circular economic systems in China’s different provinces from 2007 to 2016. The results show a continuing conflict between economic growth, environmental protection, and resource recycling in China. In addition, the efficiency of pollution treatment and waste disposal (PTWD) and the production efficiency of the circular economic systems differ when different frontiers are applied. The improvement direction and potential efficiencies also differ. The production technology and PTWD technology in Eastern China are the highest, while the technology levels in Western China are the lowest. Based on management potential and technological potential, the circular economic systems in China are divided into four categories. For each category, this study provides the specific recommendations for improving production/PTWD efficiency.

Efficiency of Government-Sponsored R&D Projects: A Metafrontier DEA Approach

Government R&D investments are steadily increasing with the perception that R&D plays an important role in technological innovation and sustainable economic growth. In particular, because biotechnology is recognized as one of the next growth engines, the Korean government has recently increased their investment in biotechnology R&D. However, careful analysis of the efficiency of government-sponsored R&D projects is still lacking. In this paper, we measured the technical efficiency and technology gap ratio to investigate the efficiency of Korean government-sponsored R&D projects of 16 sub-biotechnologies from 2007 to 2013 using a metafrontier Data Envelopment Analysis approach. There was no improvement in overall efficiency between 2007 and 2013. Biochip development technology has been the most efficient sub-biotechnology field and the least efficient fields have been biotechnology product safety and efficacy assessment technology. Medical science and engineering is the closest to optimal production technology among sub-biotechnologies. The efficiency of universities and government-funded research institutes is high, while the efficiency of companies is relatively low. The results suggest that the government should improve the R&D planning process and establish a customized R&D investment strategy that considers the characteristics of technologies and the seven organization types of R&D conductors to increase R&D efficiency.

Application of the Nonparametric DEA Meta-frontier Approach with Undesirable Outputs in the Case of EU Regions

Abstract Background: The paper focusses on the efficiency evaluation of the EU-28 NUTS 2 regions production process according to the concept of the Regional Competitiveness Index 2013. Objectives: Production units are divided into four groups using the factors of regional competitiveness. Production technology also enables reduction of the undesirable outputs (a negative impact on health and long-term unemployment). Based on the analysis of distance of the production units from the efficiency frontiers, a directional output distance function assuming a constant return to scale is used. This approach thus respects the heterogeneity among the groups of regions. Methods/Approach: The nonparametric meta-frontier Data Envelopment Analysis approach was used in two steps. Firstly, the efficiency evaluation within each group of regions is provided and in the second step the meta-frontier is set down. For the measurement of the gap between the group-frontier and the meta-frontier, the technology gap ratios are provided. The paper also analyses environmental inefficiencies. Results: The obtained results indicate that a significant improvement of meta-technology ratio holds within the European context. Conclusions: The combination of empirical findings, with respect to technology gaps and environmental technology gaps, supports the evidence that traditional differences of technological frontiers formation are more significant in comparison to group frontiers constitution.

Energy Efficiency and Energy Saving Potential in China: A Directional Meta-Frontier DEA Approach

Increasing energy efficiency and exploiting energy saving potential are two important practices that can help to ensure future energy security in China. This paper proposes a new total factor energy efficiency indicator, based on the directional meta-frontier data envelopment analysis (DEA) approach, to account for the heterogeneity of production technology among provinces in China. This indicator considers both energy savings and economic development, and can also decompose the energy saving potential. An empirical research study conducted on 29 Chinese provinces indicates that the differences in energy efficiency and production technology among the Chinese regions are quite significant. Most eastern coastal provinces maintain high-energy efficiency and advanced production technology, while energy efficiency in the west is typically lower. As a rule, improvements in technical and management factors are needed to exploit energy saving potentials. However, the emphasis on these two factors in each province should differ. China’s general energy efficiency is relatively low; the absolute amount of nationwide energy saving potential is on the rise.

Energy efficiency and production technology heterogeneity in China: A meta-frontier DEA approach

The heterogeneities of production technology among provinces in China cause difficulties for unbiased evaluation of energy efficiency. Using meta-frontier data envelopment analysis (DEA) approach, this paper proposes a new method for measuring energy efficiency by considering the “technology gap” and analyzes it as a discrete source of energy inefficiency. This empirical study has three major findings: Firstly, the energy efficiency and technology gap are significantly different in the east, central and west, and most provinces in the east maintain high energy efficiency and advanced production technology, while energy efficiency in the west is on the contrary. Secondly, both the technology gap and management related to energy utilization are important sources of energy inefficiency in the central and the west provinces, and the effect of the technology gap is more obvious. Finally, though overall energy efficiency in China is not high by relative standards and significant regional difference exists, potential energy-saving strategies have been discovered in recent years.