Study Of Environmental Technical Efficiency For Provincial-level Based On Parametric Hyperbolic Distance Function

In recent years, environmental and development issues have become a hot topic among Chinese government and people, and it is also the focus of academic and policy research. Since the reform and opening up, China has achieved rapid economic development, but the extensive economic growth pattern has not changed fundamentally, which make the environmental pollution and ecological damage even more serious and it is not conducive to the implementation of the strategy of sustainable development. In order to improve the environment, our government has continually explored the development of relevant environmental policies. Reasonable estimates of environment technical efficiency and analysis of the factors is the premise of effective polic ies, so this research has some theoretical and practical significance.This paper studies the environment technical efficiency of the provincial as a starting point, we use parametric distance functions hyperbolic efficiency measure to do that. On this basis, the use of regression model let us environment analyze the factors affecting environment technical efficiency, and to explore the differences between different regions, in order to make recommendations for the regional development policies.This paper is divided into six chapters, the first chapter is the introduction part, mainly discusses the background and significance of the study. The second chapter is a literature review, the main system introduces the concept of environmental technology efficiency, analysis of the existing literature, environmental technical efficiency calculation methods and influencing factors, and pointed out the lack of existing research. The third chapter is the theoretical basis of section which detailing the theoretical model and the use of stochastic frontier analysis (SFA) estimated environmental technology efficiency way in order to support further empirical estimates study. Chapters IV and V is the empirical study. The fourth chapter measure environmental technical efficiency using hyperbolic distance function model based on the data of1995-2010, China’s29provinces panel data. We use capital, labor and energy consumption as input variables, gross industrial output value as desirable output variables, SO2emissions as non-desirable output variables to measure efficiency. Based on that, we use cluster analysis, according to estimates of the value of the efficiency of environmental technologies into three efficiency area. In fifth chapter, we use the regression model to test the impact of economic factors, energy technical factors, institutional factors and regional factors on the environment technical efficiency. And we test if they are the same in different efficiency area. The sixth chapter is the conclusion and policy recommendation which summarizes the main conclusions of this study, and make relevant policy recommendations based on the findings.After calculation parameters of the hyperbolic function of distance, the average environment technical efficiency is0.3637, which represents in the current level of technology, while maintaining the same input factors, the country’s gross industrial output value can increase174.95%, while SO2emissions can63.63%lower. Overall technical efficiency of China’s environmental decline at first and then show upward trend. There were significant differences in the environmental technology efficiency of eastern middle and western, the eastern part has higher value. And the highest efficiency is Guangdong, Jiangsu and Shandong while Qinghai, Guizhou, Ningxia has the lowest level. In terms of factors, industrial structure, foreign dependence, environmental pollution control investment are significant negative impact on the environment technical efficiency. The energy structure and R&D expenses has a positive impact on the efficiency of environmental technologies; influencing factors and the direction and intensity of the different zones of efficiency, there are some differences in the level of efficiency especially in areas exhibiting moderate, in the policy need to be a different focus.About the innovation of this paper is, first of all, the existing literature more like to use directional distance function(DDF), but it has some limitations in the use of this function. When it comes to directional distance function, the measurement is largely depends on the vector direction which researchers selected. So it is not objective. The hyperbolic distance function can effectively overcome these problems, so this paper is calculated the environment technical efficiency using hyperbolic distance function. Secondly, for the calculation method, this paper using parametric stochastic frontier approach, while most people established their functions under existing studies of non-parametric modeling framework, but the non-parametric model is hard to do statistic. What’s more, and the reliability and comparability of the results using non-parametric model is not strong. In addition, the paper we use cluster analysis, discusses the differences between the different issues affecting the efficiency of district factors, and existing research to explore factors affecting mostly consider the overall level, or is carried out geographical divisions, less involved research by efficiency subregion.