Prague Economic Papers 2022, 31(1):25-57 | DOI: 10.18267/j.pep.791

Efficiency Measurement and Inefficiency Environmental Factors of China's Green Economy

Xiaoli Qin ORCID...a,b, Jingzheng Wang ORCID...b, Yiping Liu ORCID...a
a School of Economics and Management, Nanjing University of Aeronautics and Astronautics, Nanjing, Jiangsu, China
b School of Business, Suqian University, Suqian, Jiangsu, China

This paper uses the projection pursuit method (PP method) to construct a comprehensive output indicator and uses the heterogeneous stochastic frontier model (HSFM model) to calculate China's green economy efficiency and analyse effects of environmental factors on the inefficiency fluctuation of green economy. Conclusions are drawn as follows: (1) The average value of China's green economy efficiency is generally low, and a regional heterogeneity of green economy efficiency is obvious. (2) For the overall inefficiency fluctuation of China's green economy, openness has a significant inhibitory effect; the industrialization level and technological level have a certain inhibitory effect, but their importance is weaker than that of openness; fiscal decentralization has an insignificant effect. Since 2001, changes in unit openness and the unit industrialization level have had a strengthened restraining effect on the inefficiency fluctuations of China's green economy, and the change in the unit technology level has had a small and stable inhibitory effect on China's green economy's inefficiency fluctuation. (3) Openness and the industrialization level have had a significant inhibitory effect on the inefficiency fluctuation of China's regional green economy in the Eastern region more than in the Central and Western regions; the technological level has had a certain inhibitory effect in the Central and Western regions, but its influence is lower than that of openness. The inhibitory effect of unit change in openness and the industrialization level on the inefficiency fluctuation of green economy in the Central region is greater than that in the Eastern region. The inhibitory effect of unit change in the technological level on the inefficiency fluctuation of green economy in the Western region is obviously greater than that in the Central and Eastern regions. These conclusions can provide a mathematical basis for a reform of China's green economy efficiency.

Keywords: Green economy, efficiency, inefficiency fluctuation, projection pursuit method (PP method), heterogeneous stochastic frontier model (HSFM model)
JEL classification: O47

Received: April 23, 2021; Revised: September 29, 2021; Accepted: November 16, 2021; Prepublished online: December 10, 2021; Published: March 1, 2022  Show citation

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Qin, X., Wang, J., & Liu, Y. (2022). Efficiency Measurement and Inefficiency Environmental Factors of China's Green Economy. Prague Economic Papers, 31(1), 25-57. doi: 10.18267/j.pep.791
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