Working Paper Article Version 1 This version is not peer-reviewed

Driving Factors of the Technical Efficiency Trends of Environmental Protection Enterprises: Evidence from 279 Companies in China

Version 1 : Received: 2 December 2019 / Approved: 4 December 2019 / Online: 4 December 2019 (04:52:50 CET)

How to cite: Wang, R.; He, X.; Diao, X. Driving Factors of the Technical Efficiency Trends of Environmental Protection Enterprises: Evidence from 279 Companies in China. Preprints 2019, 2019120042 Wang, R.; He, X.; Diao, X. Driving Factors of the Technical Efficiency Trends of Environmental Protection Enterprises: Evidence from 279 Companies in China. Preprints 2019, 2019120042

Abstract

The environmental protection industry provides important support for achieving sustainable economic development. In China, because the actual operation of environmental protection enterprises is driven by multiple factors, the input-output efficiency displays relatively complex distribution characteristics and evolutionary trends. In view of the differences in the definitions of efficiency and the limitations of efficiency factors in existing research, we use no balanced panel data from the environmental protection listed companies in China from 2014-2018 as the research sample, and an analysis is performed based on the stochastic frontier analysis (SFA) framework. A comprehensive investigation of the various factors that influence efficiency yielded the following empirical conclusions. (1) Efficiency improvements in Chinese environmental protection enterprises display significant “market-driven” and “policy-driven” characteristics, and there is negative feedback related to “funding”. (2) The environmental protection industry in China has strong “blue ocean” market characteristics, and the enterprise efficiency needs to be more dependent on decreased scale expansion and operations. Management improvements, not product innovation, require increased vigilance to decrease expansion. Therefore, to improve the efficiencies of Chinese environmental protection enterprises, focus should be placed on market changes and the creation of a differentiated policy support system. Additionally, it is necessary to monitor the blind expansion of microenvironmental enterprises and the risk of leveraging.

Subject Areas

environmental protection enterprise; input-output efficiency; market driven; policy driven

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