Assessing the eco-efficiency of industrial investment in China: a DEA approach

Although the rapid growth of industrial investment has greatly contributed to Chinese socioeconomic development, the consequent resource depletion and environmental degradation have seriously restricted its potential for sustainability. Hence, the concept of eco-efficiency of industrial investment (EEII) is constructed under the comprehensive perspective of economic benefits, energy consumption and environmental impact. To assess the true EEII in China, a new super-efficient undesirable-outputs slacks-based measure DEA model is proposed by adding a new constraint condition to rebuild the reference set. The proposed model not only can consider the joint production of desirable and undesirable outputs, but also achieves full ranking of all decision-making units. Taking 30 provinces in China as an example, our empirical results indicate that the eco-efficiency of China's industrial investment is generally low (0.643) in 2015-2020, and there exists significant regional disparity, in that the average value of EEII in the eastern regions (0.851) is the highest, followed by the central regions (0.594) and the western regions (0.469). Finally, this study provides some suggestions for policymakers to promote the EEII based on its influencing factors, analysed using panel-data Tobit regression.