Environment/Welfare-Oriented Productivity And Its Application In The Evaluation Of Economic Development

For a long time, negative impact on ecological environment and public welfare from rapid economic growth is rarely considered by the production behavior of regions and enterprises. This development pattern is based on more and more natural resources and human capital, ignoring the environmental pollution emission. As a result, this pattern has already overdrawn environmental resource, and human capital. Under this pattern, China has experienced considerable economic growth, and since2010China has overtaken Japan to become the world’s second largest economy from the view of economic scale. However, hundreds of millions of people does not fully enjoy the benefits of economic growth. Since1990’s, as demographic dividend gradually fade, resource shortages, environmental pollution and social welfare problems, such as pension, medical care and education, etc. are becoming more and more prominent. Energy, resources and environment are important restricting factors of sustainable development in our country.The balanced development of economic growth, ecological environment, and social welfare has already become an important subject to contemporary societies. The dilemma faced by China’s development is to maintain a certain growth rate, meanwhile to avoid ecological damage and resource depletion. Growth is not an end by itself, but a means to create better living conditions. Single indicator of economic growth is now inexplicable as the characterization and measurement of the real situation of economic and social development, under this pursuing economic quantity growth pattern, economic and social development may be lead into a vicious circle of low-efficiency. Productivity can reflects the efficiency and effectiveness of economic activities, and it is an important variable in the management of economic activities. In addition, productivity has always been the critical factor of economic growth and social welfare, not only because productivity takes input and output factors into consideration, but because there have close connections between productivity change and economic growth. However, traditional productivity theory has taken economic growth as the core content, not considering environmental disruption and social welfare, which makes it cannot accurately reflect the real situation of social economic development. Aiming at the dilemma mentioned above, it is necessary to take some time to reconsider productivity, to rethink the development mode from the view of productivity, and to provide a better path to realize the economic growth mode transformation successfully. Accordingly, starting with the production process, this paper reveals the potential factors of productivity, and expands the concept of productivity, which makes it correspond to actual needs. In the following empirical analysis, this paper applies the expand concept of productivity to the analysis of regional level; in the study of micro enterprise level, this paper gives a comprehensive overview about the relationship between enterprise environmental performance and economic performance. The main results and innovations of this paper is as follows:1. Productivity is determined by the effective utilization of all the elements of productive force during the production process. The production process is a dynamic process between human, nature and society. Generally speaking, the production process contains the production technical process and socioeconomic process, and the production process is closely related to social and economic institutional factors. From the view of economy of "to achieve greater results at low cost" and the initiative of productivity essentials, there should be a management process between these two process. This management process can help to realize the coexistence of human, society and nature. Based on this decomposition of the production process, traditional concept of productivity is expanded. The expanded concept of productivity is more in line with the practice of social development, because it contains not only effectiveness and efficiency in economic aspect, but also social welfare and ecological environment.2. As a normative concept, sustainable development is a process of dynamic optimization, which includes four dimensions:economy, environment, society and institution. Actually, the scale and quality of economic growth influence the ecosphere dramatically, and are reducing its ability to sustain economic development. Based on social throughput, this paper believes that sustainable development is defined as the entropy material flow returned to nature through economic entity cannot drop, and its target is to balance the relationship between human and natural ecology. Meanwhile, ecosystem is a non-growth parent system with limited carrying capacity, which includes three sub-system, i.e. social welfare, economy and environment. Based on the exiting research, from the viewpoint of realizing the sustainable development of human and ecology, this paper discusses and analyzes detailedly the input-output factors of environment and social welfare in the process of production, and provides detailed input-output index system.3. More and more researchers try to include environmental undesirable output into the measurement of productivity, and develop a method to calculate Malmquist-Luenberger productivity index by using non parametric method of data development analysis. Hence, this paper explains directional distance function and Malmquist-Luenberger theoretically, and gives the relations between Malmquist-Luenberger index and Malmquist index. This methodology lays the theoretical foundations for calculating regional productivity. Furthermore, there exists a remarkable lag between different regions for the step by step implementation of reform and open-up policy. Hence, by employing the above methodology and index system, this paper studies the changes of productivity and its decomposition of China’s30regions, and8social and economic regions. The results of empirical analysis are as follows:(1). The results of Wilcoxon rank sum test and nuclear density map shows that there are differences between traditional Malmquist productivity, total productivity (Malmquist-Luenberger), and environment/welfare-oriented productivity. This means that the total productivity provided in this paper, which includes environmental input, welfare input and environmental undesirable output, has important significance in theory and practice.(2). Viewed from Malmquist-Luenberger index, the changes of China’s productivity from1997-2011mainly comes from technical progress, but not efficiency change. The results of σ convergence analysis show the level of productivity in different regions is more and more close, and the disparity gradually diminished; And there is convergence tendency in total productivity judged from the results of β convergence analysis. After including environmental undesirable outputs, positively affects to economic performance of environmental protection happen in more than2/3regions, especially in remote areas. These observations provide very compelling evidence that reasonable energy-saving emission reduction policies and economic development affect each other interactively. The β convergence analysis of welfare-oriented indicates that the region’s welfare in China is quite unbalanced, there is significant convergence tendency only in nothern coastal and south-west areas. This means the overall level of Chinese welfare still remains at rising.(3). In contrast, environmental pollution emissions are more severe in rapid economic development areas, and many people are missing out on the rewards of economic growth. The analysis on Chongqing suggests that great progresses have been achieved since it becomes a municipality directly under the Central Government, but ecological environment and social welfare have also been serious influenced viewed from the changes of total productivity. In addition, this phenomenon also happened in the coastal areas. Therefore, these areas badly need to upgrade economic structure, to transfer development pattern, to protect ecological environment and to promote social welfare according to the changes of total productivity.4. In the end, by lack of productivity index in enterprise level, by employing Meta analysis to collect literature, this paper mainly discusses influential factors that affect the relationship between enterprise environmental performance and economic performance by using ordered probit analysis. The results show that there is a time lag in the effect of environmental performance on economic performance, and as the observation year getting longer, the effect is more obvious. Moreover, the integrity of policy and its implication will influence this effect. Finally, because different indicators reflect benefits of different stages, there are different influences on accounting and marketing economic performance index.Above all, it has been proved that environmental/welfare performance should have a positive role in promoting economic growth from macro and micro perspective. The environment/welfare oriented productivity and its measurement suggested in this thesis are more in line with the practice in China. This expanding concept and its measurement can provide reliable measurement methods to the true state of countries, regions and enterprises. Therefore, it has very important actual and direct sense.