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A two-stage environmental efficiency evaluation of China’s industrial sector considering ratio data

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Abstract

When characterizing the environmental management capacity of the industrial sector, it is necessary to compare the situation between before and after treatment of pollutants. Environmental indicators that reflect this contrast usually have ratio characteristics. Therefore, considering ratio measures in evaluation can more comprehensively reflect the environmental management results. However, ratio indicators cannot be directly applied in traditional DEA models due to their structure, and previous researchers generally use volume measures instead of ratios to avoid inaccurate evaluation results. In this paper, we extend the ratio DEA model to investigate the impact of ratios on environmental performance evaluation results. First, we extend the single-stage ratio DEA model as a new method for transforming undesirable outputs. Next, we propose a two-stage DEA efficiency evaluation model that considers ratio outputs and apply the model to evaluate the energy efficiency and environmental management efficiency of China’s industrial sector in two stages, where ratio outputs such as the compliance rate and utilization rate of emissions are considered. Finally, we analyze the two-stage efficiency scores of the industrial sector and the trends in environmental performance over a five-year period and provide policy suggestions for efficiency improvements.

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Acknowledgements

The work is financially supported by National Natural Science Funds of China (Nos. 72171219, 71921001, 71971203, 71801206), the Four Batch Talent Programs of China, the Fundamental Research Funds for the Central Universities (WK2040000027), and the Special Research Assistant Support Program of Chinese Academy of Sciences.

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Authors and Affiliations

  1. School of Humanity and Law, Hefei University of Technology, Hefei, China

    Xiaohong Liu

  2. School of Management, University of Science and Technology of China, Hefei, China

    Xiang Ji, Mingjun Li & Jie Wu

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  1. Xiaohong Liu
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  2. Xiang Ji
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  3. Mingjun Li
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  4. Jie Wu
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Correspondence to Mingjun Li or Jie Wu.

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Appendix A: Appendix tables

Appendix A: Appendix tables

See Tables 7, 8, 9, 10, 11.

Table 7 BIAS and MSE test for different transformation methods
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Table 8 BIAS and MSE test for different transformation methods
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Table 9 Descriptive statistics of inputs and outputs in first stage of industrial sectors (2011–2015)
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Table 10 Descriptive statistics of inputs and outputs in second stage of industrial sectors (2011–2015)
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Table 11 Corresponding names of industrial sectors
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Liu, X., Ji, X., Li, M. et al. A two-stage environmental efficiency evaluation of China’s industrial sector considering ratio data. Ann Oper Res (2022). https://doi.org/10.1007/s10479-022-04981-0

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