Analysis of China's Regional Eco-efficiency: A DEA Two-stage Network Approach with Equitable Efficiency Decomposition

Increased concern over environmental pollution issues in China has caused eco-efficiency analysis to become a hot research topic. This study focuses on the eco-efficiency analysis of Chinese provincial-level regions, regarding each region as a two-stage network structure. The first stage is characterized as the production system and the second stage as the pollution control system. Regarding the pollution emissions as intermediate products, a two-stage data envelopment analysis model is proposed to obtain the eco-efficiency of the whole two-stage system. To measure efficiencies for the two sub-stages in each system, an equitable efficiency decomposition model and an algorithm are provided. Next, an empirical study of regional eco-efficiency analysis of 30 Chinese regions reveals that in 2013 the majority of these regions in China had poor ecological performance. Further, four categories of regions are identified by analyzing the efficiencies of each region's two sub-stages and some suggestions are provided to improve the eco-efficiencies of regions in each category. Additionally, analysis of regional disparities in eco-efficiency shows that in China the average eco-efficiency of the eastern area is higher than those of the central and western areas.