Quantitative Ecological Risk Analysis by Evaluating China's Eco-Efficiency and Its Determinants

ABSTRACT Industrial production can produce large amounts of harmful by-products, causing serious pollution and ecological risk. In addition, if government regulations are subjected into the industries, huge cost risk will be faced. This article adopts a two-stage slack-based undesirable-output data envelope analysis (DEA) model to measure the eco-efficiency of China. In the first stage, we analyze the eco-efficiency of each province of China, and in the second stage, we employed a truncated bootstrap method to understand the determinants of eco-efficiency. The results indicate that whereas the eco-efficiency of the eastern region was the highest, that of the western region was the lowest. The western region's economy lagged behind that of other regions, and its environment suffered from heavy pollution. It was found that the level of industrialization did not contribute to eco-efficiency. However, promotion of the service industry, investment for the environment, and regional innovation have positive effects on eco-efficiency.