Slacks-based Measure Data Envelopment Analysis Research Articles

Influence of FDI quality on energy efficiency in China based on seemingly unrelated regression method

How to use foreign direct investment (FDI) to achieve sustainable development of resources, environment and economy in China has become an increasingly important proposition. Previous studies mainly focused on the relationship between FDI quantity and energy efficiency, and neglected the important role of FDI quality in improving energy efficiency. Based on the panel data on 30 provinces in China from 2003 to 2016, this paper uses slacks-based measure data envelopment analysis (SBM-DEA) method to estimate energy efficiency, and then uses seemingly unrelated regression (SUR) method to empirically study the influence of FDI quality on energy efficiency. The results are presented as follows: (1) From the national level view, FDI quality plays a significant role in promoting China’s energy efficiency; (2) From the regional-level view, FDI quality plays a significant role in promoting China’s energy efficiency in coastal and inland areas, but its role in the inland area is significantly greater than that in the coastal area. The results indicate that China should make full use of the opportunity of global economic integration and pay more attention to the improvement of FDI quality, so as to promote energy efficiency and low-carbon economic development.

Handling negative data in slacks-based measure data envelopment analysis models

This paper proposes slacks-based measure (SBM) data envelopment analysis (DEA) models that handle negative data. Unlike existing negative data allowable DEA models, the proposed SBM DEA models are consistent with ordinary SBM models and units invariant, they handle various types of returns to scale, and they avoid division by zero. These new SBM DEA models transform original negative inputs and outputs into positive counterparts based on a newly defined “base point”. Hence, these models are referred to as the BP-SBM DEA models. In addition to the basic BP-SBM DEA models, this research further develops data-oriented and application-oriented BP-SBM DEA-type models for different application problems involving negative data. Numerical examples are provided to illustrate various aspects and implementation details of these models.

Evaluating the Efficiency of Transit-Oriented Development Using Network Slacks-Based Data Envelopment Analysis

The purpose of this research is to evaluate transit-oriented development (TOD) efficiency in Seoul using the network slacks-based measure data envelopment analysis (NSBM DEA) model. The smartcard data and socio-economic data are used to evaluate the transit efficiency of 352 subway station areas in Seoul. To measure the TOD efficiency, the two-stage network is designed with the transit design stage and the transit efficiency stage. The overall efficiency score of each station area is estimated through each score of the stage. The results of the efficiency evaluation by station area indicate that the overall efficiency score average is 0.349, with the transit design score and efficiency score estimated to be 0.453 and 0.245, respectively. The results indicate that the balance of each stage is crucial to achieve an efficient station in the concept of transit efficiency. With the efficiency scores of the 352 subway station areas, the TOD efficiency is also evaluated by the administrative units in Seoul. The results of district analysis reveal that the top 10 efficient administrative units are characterized by both residential and commercial land use. The results indicate that efficiency is found to be good in areas having both residential and commercial characteristics.

Measuring regional transport sustainability using super-efficiency SBM-DEA with weighting preference

Abstract The development of transportation sector promotes China's rapid economic growth, but also brings a negative impact to China's society and environment such as pollution and energy waste. However, limited attention has been paid to China's transportation system, especially in terms of transport sustainability evaluation at a regional level. In this study, we first propose a new indicator system that involves systematic, economic, social and environmental indicators for measuring regional transport sustainability. Then, we propose an improved super-efficiency slacks-based measure DEA (SBM-DEA) model with weighting preference to evaluate the regional transport sustainability efficiency. An empirical application to measuring transport sustainability in Shaanxi province, China, during the period of 2000–2015 is presented to show the effectiveness of the proposed model. The empirical results show that Shaanxi's transport sustainability over half of the years is inefficient and its main reason is that the efficiency of environmental and social dimensions is low. Compared the result with that obtained by the SBM-DEA model without weighting preference, the number of effective decision-making units is reduced by the proposed DEA model. Computational results show that the evaluation result is generally in line with the reality.

Urban Ecological Efficiency and Its Influencing Factors—A Case Study in Henan Province, China

The urban ecological civilization construction relates to welfare of the people and the national future. It is an important field of the high-quality economic development to improve the urban ecological efficiency level. The purpose of this research is to provide a new perspective and method for the quantitative study of the urban sustainable development, and also to provide some decision-making references for the improvement of the urban ecological efficiency in Henan province. This paper uses the slacks-based measure-data envelopment analysis (SBM-DEA) model containing the undesirable output and the Malmquist index model to fully evaluate the urban ecological efficiency level in Henan province during the period of 2005–2016, via both the static and dynamic analysis. Based on this, the bootstrap regression model is applied in analyzing the influencing factors of the urban ecological efficiency. The research shows three findings. First, according to the static efficiency analysis, the urban ecological efficiency in Henan province is low as a whole and has a big promotion space. Moreover, there is a significant difference in the urban ecological efficiency level among the five regions because of the different geographical locations and social and economic development situations of the cities. Second, according to the dynamic efficiency analysis, in the last 12 years, the urban ecological efficiency in Henan province has shown an overall growth trend, and the technological progress has played a major role in promoting the urban ecological efficiency in Henan province. Third, according to the influencing factor analysis, the governmental financial support hinders the improvement of the urban ecological efficiency in Henan province, while the level of opening to the outside world, the urban population density, and the urban greening level promote it.

Coupling analysis of urbanization and energy-environment efficiency: Evidence from Guangdong province

Rapid urbanization has been accompanied by a series of environmental and energy-related issues. It is essential to better understanding the coupling relation between energy-environment efficiency and urbanization in achieving the goal of sustainable urbanization. In this paper, an index system was firstly established for the measurement of urbanization quality scores based on the four aspects of population, economy, society, and space. We then undertook a slack-based measure data envelopment analysis in order to measure energy-environment efficiency. This allowed us to establish a coupling coordination degree model to investigate the coupling relationship between energy-environment efficiency and urbanization. Our findings include the following: (1) Spatiotemporal diversity was apparent in the estimated urbanization quality scores within the province, with high-values areas mainly being concentrated in the Pearl River Delta; (2) A growth trend was identified in energy-environment efficiency values in western Guangdong and the Pearl River Delta, while in eastern Guangdong energy-environment efficiency followed a downward trend, and it stayed stable at a low level in northern Guangdong. Energy-environment efficiency also displayed significant spatial differentiation; (3) The coupling relationship between the energy-environment efficiency and urbanization of Guangdong throughout the research period went from a low coupling stage to a medium coupling stage. Most cities in Guangdong remained in the moderate and low coupling stages, with the exception of Guangzhou and Shenzhen, which took the lead in entering the highly coupling stage. The findings of this paper are of great implications for government in achieving the coordinated development of energy-environment efficiency and urbanization.

An Integrated Analytic Hierarchy Process—Slack Based Measure-Data Envelopment Analysis Model for Evaluating the Efficiency of Logistics Service Providers Considering Undesirable Performance Criteria

Sustainable concerns are reputed to be of the utmost priority among governments. Consequently, they have become more and more of a concern among supply chain partners. Logistics service providers (LPs), as significant contributors to supply chain success but also one of the greatest generator of emissions, play a significant role in reducing the negative environmental impact. Thus, the performance evaluations of LPs should necessarily involve such a measure which, firstly, represents a balance between all three pillars of sustainability and, secondly, consider the desirable and undesirable performance criteria. This paper proposes an integrated analytic hierarchy process (AHP) and slack-based measure (SBM) data envelopment analysis (DEA) model, based on the assumption of a variable return to scale (VRS). An AHP pairwise comparison enables selecting the most influential input/output variables. Output-oriented SBM DEA provides simultaneously evaluation of both the undesirable and desirable outputs. The proposed model was tested on a numerical example of 18 LPs. The comparison of output Charnes, Cooper and Rhodes (CCR) and SBM DEA models resulted in a higher number of inefficient LPs when the SBM DEA model was applied. Moreover, efficiency scores of inefficient LPs were lower in SBM DEA model. The proposed model is fair to those LPs that are environmentally friendly.

Market share and performance in Taiwanese banks: min/max SBM DEA

This research used a min/max slacks-based measure data envelopment analysis (SBM DEA) to explore the operational efficiency of 37 banks in Taiwan from 2012 to 2016, with the main research goals being to analyze bank efficiency, compare the differences in the average efficiency values of two models, and identify the need for improvements in the inputs and outputs, from which it was found: (1) the average efficiency of the SBM-max model for each year was higher than the SBM-min model. (2) The best input performance was “deposits”, and the worst input was “the number of employees.” The best output performance was “loans”, and the worse output was “investments”. (3) The average efficiency of the finance holding company subsidiary banks was higher than the non-finance holding banks, the average efficiency of the large-scale banks was higher than the small-scale banks, and the average efficiency of banks with high deposit and loan market share was higher than banks with low deposits and loan market share.

Relating Efficiency with Service Compliance Indices in Public Transportation Using Slack-based Measure Data Envelopment Analysis and Shadow Prices

In many countries, bus operators are private companies whose service has been leased by government agencies. These agencies develop service compliance indices or measures to keep track of factors such as passenger satisfaction, frequency, and regularity but do not necessarily include the objectives of the operators in the assessment. In this paper, we used slack-based measure data envelopment analysis (SBM) to investigate whether it is possible for a bus operator to be efficient (from a private perspective) and match required standards of frequency and regularity. In doing so, data collected from two major bus operators in Santiago, Chile has been used comprising 99 services. The results show that when private objectives, namely revenues, are included in the analysis, bus operators do not necessarily seek to improve the regularity of their service. Moreover, it was found that some bus services are on the efficient frontier while keeping low performance measure standards. Using the shadow prices of the models, it was also found that improving the performance measures will be hard for many bus services unless there is a significant change in factors that are not under control of the operators (i.e., number of stops, length of the route, etc.). This shows the difficulty of correctly aligning the private objectives of operators with agencies’ objectives.

Data-Driven Approach to Improving the Risk Assessment Process of Medical Failures.

In recent decades, many researchers have focused on the issue of medical failures in the healthcare industry. A variety of techniques have been employed to assess the risk of medical failure and to generate strategies to reduce the frequency of medical failures. Considering the limitations of the traditional method—failure mode and effects analysis (FMEA)—for risk assessment and quality improvement, this paper presents two models developed using data envelopment analysis (DEA). One is called the slacks-based measure DEA (SBM-DEA) model, and the other is a novel data-driven approach (NDA) that combines FMEA and DEA. The relative advantages of the three models are compared. In this paper, an infant security case consisting of 16 failure modes at Western Wake Medical Center in Raleigh, North Carolina, U.S., was employed. The results indicate that both SBM-DEA and NDA may improve the discrimination and accuracy of detection compared to the traditional method of FMEA. However, NDA was found to have a relative advantage over SBM-DEA due to its risk assessment capability and precise detection of medical failures.

A dynamic multi-stage slacks-based measure data envelopment analysis model with knowledge accumulation and technological evolution

Dynamic data envelopment analysis (DEA) models are built on the idea that single period optimization is not fully appropriate to evaluate the performance of decision making units (DMUs) through time. As a result, these models provide a suitable framework to incorporate the different cumulative processes determining the evolution and strategic behavior of firms in the economics and business literatures. In the current paper, we incorporate two distinct complementary types of sequentially cumulative processes within a dynamic slacks-based measure DEA model. In particular, human capital and knowledge, constituting fundamental intangible inputs, exhibit a cumulative effect that goes beyond the corresponding factor endowment per period. At the same time, carry-over activities between consecutive periods will be used to define the pervasive effect that technology and infrastructures have on the productive capacity and efficiency of DMUs. The resulting dynamic DEA model accounts for the evolution of the knowledge accumulation and technological development processes of DMUs when evaluating both their overall and per period efficiency. Several numerical examples and a case study are included to demonstrate the applicability and efficacy of the proposed method.

Performance Analysis of Peer-to-Peer Online Lending Platforms in China

In this paper we intend to check the performance of Peer-to-Peer online lending platforms in China. Different from commercial banks, Peer-to-Peer (P2P) platforms’ business process is divided into the market-expanding stage and the risk-managing stage. In the market-expanding stage, platforms are intended to help borrowers attain more money, and in the risk-managing stage, platforms try their best to ensure that the lenders’ money is repaid on time. Thus, with a sample of 66 leading big P2P platforms, and a novel two-stage slacks-based measure data envelopment analysis with non-cooperative game, the performance efficiency of each stage as well as the comprehensive efficiency are evaluated. The results show that the leading big platforms are good at managing the risk, although risk management is not the major concern of most P2P platforms in China. We also find that average performance efficiency of the platforms that are located in non-first tier cities is higher than that in first tier cities. This unexpected result indicates that development of the P2P industry may relieve the severe distortion of resource allocation and efficiency loss arising from unbalanced regional development. Then dividing the platforms into different groups according to different types of ownership, we verify that performance efficiency of the P2P platforms from the state-owned enterprise group is in a dominant position, and the robustness check indicates that the major advantage of the state-owned enterprise (SOE) group mainly lies in the risk management. We also make a further study to figure out the sources of inefficiency, finding that it mainly arises from the shortage of lenders, the lack of average borrowing balance, and the insufficient transparency of information disclosure. In the last section we conclude our research and propose some advice.

Has Economic Competition Improved China’s Provincial Energy Ecological Efficiency under Fiscal Decentralization?

The study of environmental-oriented total factor energy efficiency considering pollutants as a non-expected output has attracted wide attention, but few studies have included social welfare into the above framework for analyzing China’s provincial energy ecological efficiency (EEE). In addition, China’s fiscal decentralization and economic competition have created tremendous momentum for economic growth; however, research has been lacking on whether they have improved China’s energy utilization, pollution control and social welfare level. To fill these gaps, by applying the 2000–2016 panel data from 30 provinces and considering the social welfare condition, we use the slacks-based measure data envelopment analysis (SBM-DEA) method to calculate EEE and build empirical model to test the relation between EEE, fiscal decentralization and economic competition. The results reveal that, firstly, in the last 16 years EEE has been getting worse and the situation of the middle and western areas of China are poorer than in the eastern area, with the middle area still deteriorating further. Secondly, economic competition among local governments aggravates the provincial EEE in China, while the high degree of fiscal decentralization in state governments significantly contributes to improve the EEE; and the co-impact of economic competition on EEE has been negatively strengthened against the background of fiscal decentralization. Thirdly, the influence of economic competition on EEE presents a regional difference; economic competition makes the degree of EEE go down in the east and middle regions, while by contrast, economic competition has helped the EEE level in western regions. The conclusions point out that the temporal trend of EEE in various regions of China, and the economic competition actions adopted by most Chinese local governments to enhance their own financial strength, have not improved energy efficiency and pollution control capability, and has reduced the social welfare of the region. Accordingly, policy proposals are that the Chinese government can adjust the fiscal and tax revenue system and preferential tax system of the central government and local governments and curb competition between provincial jurisdictions.

Environmental efficiency analysis and estimation of CO2 abatement costs in dairy cattle farms in Umbria (Italy): A SBM-DEA model with undesirable output

Abstract Livestock activity is one of the most contributors to climate-change emissions in the agriculture sector. European environmental policies face with the challenge of increasing farmers economic gain not conflicting with environmental aim at the same time, to meet targets for reducing greenhouse gas emissions (GHG). The paper aims to contribute to the discussion on CO2 emission mitigation by providing efficiency performance measures in the presence of joint production of milk and GHG emissions. A Slacks-Based Measure-Data Envelopment Analysis (SBM-DEA) with undesirable output was adopted and integrated with Life Cycle Analysis (LCA) results from 10 dairy cattle farms in Umbria (Italy) to estimate their environmental efficiency and emission reduction potential. In addition, the dual model of the SBM-DEA was used to quantify the marginal CO2 reduction costs. Four farms resulted in no CO2-eq emission efficient, with a reduction potential ranging from 45.7% to 26.3% of CO2-eq. An average abatement cost of € 243.08 in terms of lower milk production per ton of CO2-eq reduced, was estimated for the whole sample. A positive relationship between marginal abatement costs and CO2-eq efficiency scores was estimated. Marginal abatement costs knowledge could allow assessing the economic impacts of different farms strategies aimed at reducing polluting emissions, as well as the introduction of incentive mechanisms by public decision makers.

Sustainable urbanization performance evaluation and benchmarking

PurposeThe purpose of this paper is to develop a suitable framework of sustainable urbanization performance evaluation from the view of efficiency for mitigating the unbalance between the theoretical research of sustainable urbanization and the practical need of sustainable urbanization.Design/methodology/approachA slack-restricted slack-based measure data envelopment analysis (DEA) model and two sustainable urbanization benchmarking methods with individual and centralized view, respectively, are developed based upon the classical DEA theory.FindingsThe empirical results show that China is now suffering a relatively low level of sustainable urbanization. Too much waste water emission, too small an urban population proportion, and too much resource wastage are the major factors that drive China’s urbanization away from sustainability.Originality/valueHaving the overall aim of practical urbanization, the proposed framework can help stakeholders recognize different sustainable urbanization performance levels by offering them accurate sustainable urbanization performance scores. The framework can also direct governments to improve the sustainable urbanization performance. The empirical analysis of China’s provincial region sustainable urbanization performance with the proposed framework further demonstrates the theoretical and practical value of this research.

Assessing integrated water use and wastewater treatment systems in China: A mixed network structure two-stage SBM DEA model

Abstract Rapid economic growth and urbanization in China have resulted in the dual threats of shortage of water and pollution of water. It is increasingly acknowledged that the efficiency of water resource system is influenced by not only the Water Use (WU) process, but also the process of Wastewater Treatment (WT). This paper considers both WU and WT as an integrated two-stage WUWT system to provide more comprehensive efficiency evaluation. In the first stage (WU subsystem), there are two parallel units, economic and social WU sub-minors, which consume water and capital to produce economic and social benefits. Meanwhile, the undesirable wastewater inevitably arises, which is treated in the second stage (WT subsystem). In order to assess the performance of the integrated WUWT system, an extended mixed network structure two-stage Slacks-Based Measure (SBM) Data Envelopment Analysis (DEA) model is developed to measure the detailed efficiencies and spot the weak link of the system. For case study, the provincial panel data during 2006–2015 of China are selected to verify the applicability of the proposed approach. Discussion is made from both time- and region-perspectives: over the ten years, the WU efficiencies are often higher than the WT efficiencies, so more actions should be carried out to improve the process of WT; from 2006 to 2011, social WU efficiencies are often lower than economic WU efficiencies, but the social WU efficiency has been improved after 2012; in terms of the overall efficiencies, the economically and socially developed provinces also have the higher efficiencies. Furthermore, the results demonstrate that the integrated WUWT system is efficient if and only if both WU and WT subsystem are both efficient, and the WU subsystem is efficient if and only if both economic and social WU sub-minors are efficient.

Developing a two-stage approach of super efficiency slack-based measure in the presence of non-discretionary factors and mixed integer-valued data envelopment analysis

An alternatve approach of super efficiency slack-based measure data envelopment analysis has been proposed to make the projection of an efficient decision making unit strongly-Pareto efficient. The approach however did not examine the simultaneous effect of non-discretionary factors and integer requirements on efficiency measures. To obtain more accurate efficiency measures, this paper proposes a two-stage approach of super efficiency slack-based measure in non-discretionary factors and mixed integer requirements. Both new factors and requirements were first integrated into the existing approach. The optimal solution of the proposed approach was then obtained by transforming its fractional form to a linear form. Thus, the scalar measures of the proposed approach can now deal directly with discretionary mixed integer input saving-output surplus and discretionary mixed integer input excess-output shortfall. The practicability of the proposed approach was tested using empirical data of Malaysian community colleges.

Have Emission Control Areas (ECAs) harmed port efficiency in Europe?

Ports in the European Union and North America have enforced environmental regulations on controlling SOx and NOx emissions from ships in their coastal areas known as Emission Control Areas (ECAs). This study uses two-stage approaches to examine whether ECA regulations impact the efficiency of ports operating in such areas. First, port efficiencies are estimated using non-radial slacks-based measure (SBM) Data Envelopment Analysis (DEA) models. The efficiency scores estimated by the SBM DEA models are then regressed on explanatory variables, including the ECA factor, and macroeconomic indicators using bootstrapped truncated regression (BTR) models. Panel data is collected on countries in EU ECAs and non-ECAs regarding such input variables as capital and labor, with cargo as an output variable. The results indicate that ECA regulations can harm port efficiency, reflecting concerns of policy-makers and industrial managers: the average efficiency loss from an ECA designation amounts to 0.058–0.066 on a scale of 0–1, accounting for a 15–18% loss from ECA ports’ average efficiency scores.

An extension on super slacks-based measure DEA approach

In order to break the tie of efficient decision-making units, super-efficiency data envelopment analysis is proposed to fully discriminate them. Recently, a slacks-based version of the super slacks-based measure (S-SBM) is developed and a novel two-stage approach is proposed to calculate both super-efficiency score by the S-SBM model and efficiency score by the slacks-based measure model. In this paper, we extend the approach to consider continuity of efficiency scores. We illustrate the discontinuity of efficiency measure, and define a continuous slacks-based measure which is proved continuous and directly calculated. An interesting efficiency zone category is also provided. In addition, this paper investigates the relationship among the super-efficiency measures of the proposed approach and some existing approaches under variable returns to scale.

Environmental efficiency of transportation sectors in China and Korea

This article analyzes the carbon efficiency of the transportation sectors in China and Korea. It also investigates the effect of environmental regulations on efficiency and the opportunity costs of complying with these regulations. The main methodology employed is the Slacks-Based Measure Data Envelopment Analysis (SBM-DEA). The results show that Korea has improved its environmental efficiency in the transportation sector in recent years and it seems to have been relatively less affected by environmental regulations, whereas China has slightly deteriorated in its environmental efficiency for the same period and it has been relatively more affected by environmental regulations. The average opportunity cost of China’s provincial transportation industry, in complying with environmental regulations, tripled from US$590 million in 2004 to $1.8 billion in 2009. The unit loss per ton of Carbon dioxide (CO2) emission doubled from $64 in 2004 to $115 in 2009. In contrast, the average opportunity cost in Korea’s provincial transportation industry slightly increased for the same period. Similarly, the unit loss per ton of CO2 emission in Korea increased from $44 in 2004 to $57 in 2007, but then gradually dropped to $48 in 2009. In implementing its visionary low-carbon economy, the Chinese government needs to consider not only ways to improve overall environmental efficiency at a national level, but also the opportunity costs of complying with environmental regulations at a provincial level.