A Study on the Evaluation and Determinants of Green Economic Efficiency: Empirical Evidence from Provincial Panel Data in China

Abstract

In the past decades, China has continued to pursue the quantitative expansion of economic development at the expense of the environmental quality resulting in high environmental degradation. Hence, this study evaluates the economic efficiency under the constraints of energy and environment, as well as unravels the determinants of economic efficiency in 30 provinces in China during 2005 to 2019. It deploys the improved super-efficiency Slack-Based Measure (SBM) model and Tobit regression model. The statistical results show that economic growth efficiency displays a declining trend in recent years in China. However, there is a regional heterogeneity of green economic efficiency across the provinces, with the efficiency values exhibiting a clear downward stepwise distribution from the eastern to western region. Moreover, the regression results indicate that energy consumption and GDP growth have significant adverse effects on green economic efficiency. This implies that China’s economic growth is excessively reliant on energy consumption which exceeds the environmental carrying capacity, causing a decline in green economic efficiency. The study of China’s economic efficiency is fundamental because it explores the potential space for sustainable growth as well as provides clarity on the current status and prospects of economic development with a view to avoiding economic stagnation and providing policy support for sustainable economic development. Therefore, policy makers should proactively take measures to improve energy efficiency and shift economic development targets from quantitative expansion to qualitative improvement that facilitates green economic efficiency. Based on the empirical results of the different regions, this study also provides some respective policy recommendations.