Efficiency Evaluation of Regional Sustainable Innovation in China: A Slack-Based Measure (SBM) Model with Undesirable Outputs

Abstract

An efficiency evaluation of China's regional sustainable innovation, evaluating industrial waste and total energy consumption, is the main research subject in this paper. It focuses on a regional measurement and comparison of these undesirable outputs of Chinese firm activities, such as industrial SO 2 and CO 2 emissions. By applying a data envelopment analysis-slack-based measure (DEA-SBM) model with undesirable outputs indicators, the regional innovation efficiency was evaluated for 30 provinces in China, from 2002 to 2014. The results indicate that the sustainable innovation efficiency of overall China is still relatively low, and varies significantly in different regions. Central and Western China have similar sustainable innovation efficiencies, which are much lower than the sustainable innovation efficiency in Eastern China. Furthermore, the data indicate that regional sustainable innovation efficiency disparities among these three areas are decreasing. Based on these findings, reasons for the sustainable innovation efficiency gap among the different regions were analyzed. To scholars, this paper extends the research on regional sustainable innovation efficiency by implementing an undesirable output perspective to the DEA-SBM model. The findings also provide Chinese policy makers with useful decision support insights for regional sustainable innovation, and energy conservation and emission reduction policies.Sustainability 2020, 12, 31 2 of 21 differences can be addressed [15][16][17]. Research on regional innovation efficiency has gained increasing attention in recent years [18][19][20], but to the best of our knowledge, very few studies have been conducted to quantitatively evaluate sustainable innovation efficiency in China, by means of focusing on undesirable outputs like industrial SO 2 and CO 2 emissions [21,22]. Our study aims to contribute to the knowledge in this area, and does this by means of measuring and comparing unsustainable, unwanted, and undesirable outcomes/byproducts of Chinese regions' innovative firm activities. By evaluating the regional sustainable innovation efficiency of 30 provinces in China from 2002 to 2014, using the slack-based measure (SBM) model, this study focuses on the following research question: what are the differences between sustainable innovation efficiencies of different regions in China and which trends in these differences can be estimated?How to deal with SO 2 and CO 2 emissions and with related climate change has become one of the most urgent challenges of today's world. For example, it has been reported that global CO 2 emissions from fuel combustion has increased from 26,177 Mt in 2004 to 32,190 Mt in 2013. Many countries have committed to controlling SO 2 and CO 2 emissions and aim to develop a no-to low-emissions economy. In 2015, the Paris Climate Change Conference adopted the "Paris Agreement" to deal with climate change after 2020 [24]. More than 170 countries jointly signed the Paris Agreement in 2016. China and the United States officially ratified the...

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