Environmental efficiency and regional technology gaps in China: a metafrontier non-radial and non-oriental Malmquist index analysis

This paper proposes a metafrontier non-radial and non-oriental DEA to examine environmental efficiency in China. This approach takes the regional technology heterogeneity, non-radial slacks, and undesirable outputs into consideration simultaneously. The results show that undesirable output inefficiency largely contributes to environmental inefficiency. And under the metafrontier technology assumption, the technology gaps between three regions have been widened. Technology gap ratio, factor endowment level, and environmental governance capacity have a positive impact on TFEE, while industrial structure, foreign capital reliance, and energy consumption structure show the negative effect on it through two-stage regression analysis. This result suggests that emission reduction stress in China is greater than the energy savings stress in the future.