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ID: 143405

Environmental growth convergence among Chinese regions / Boussemart, Jean Philippe; Leleu, Herve; Shen, Zhiyang

Boussemart, Jean Philippe	Article
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Since the end of the 20th century, numerous studies have analyzed Chinese economic development to gauge whether China's rapid growth is sustainable. Most of these studies focused on assessing total factor productivity (TFP) in Chinese mainland provinces but suffered from methodological weaknesses by assuming constant returns to scale (CRS) for the production frontier and/or incorrectly modeling variables returns to scale (VRS) technology taking into account bad output such as carbon dioxide emissions. Our paper offers a right non-parametric programming framework based on weak disposability and VRS assumptions to estimate environmental growth convergence among Chinese regions characterized by size heterogeneity. We explicitly separate regional efficiency gaps into two components: The first studies the technical catching-up process on each one (technical effect), and the second reveals convergence or divergence in the combinations of input and output among regions (structural effect). Moreover, carbon shadow price levels for provinces can be derived through the dual version of our activity analysis framework. Our empirical work focuses on 30 Chinese regions from 1997 to 2010. The results emphasize that environmental growth convergence among regions has mainly relied on the structural effect. We find that the structural effect largely depends on the pollution cost convergence and not on the evolution of the relative prices of capital or labor. The carbon shadow price is increasing at an annual rate of 2.5% and was evaluated around 864 yuan per ton in 2010 in China while regional estimates show significant disparities at the beginning of the period.

Key Words

Carbon dioxide emissions ; Undesirable Output ; Shadow Price ; Growth Convergence ; Catching-Up ; Weak Disposability

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ID: 161873

Green growth and structural change in Chinese agricultural sector during 1997–2014 / Shen, Zhiyang

Shen, Zhiyang	Journal Article
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Green growth has become a new direction for Chinese economic development in the 21st century. Indeed, sustainable agricultural development is particularly important in China due to limits on resources and the presence of the largest population in the world. In this paper, we propose a novel decomposition of the overall inefficiency into three components of technical, mix, and scale effects at aggregate level by allowing for desirable and undesirable outputs in a non-parametric framework. We empirically investigate economic and environmental performance associated with resource misallocation (represented by input/output mix) in Chinese agricultural sector across the 31 provinces over the period 1997–2014. Our results show that average overall inefficiency in Chinese agricultural sector is 9.13% during the sample period, which suggests there exists a 7.94% possible improvement for gross output value and 1.19% potential reduction for carbon emission. Moreover, we find inefficiency is mainly due to the mix effect that requires an improvement in reallocation of inputs and this may be related to the ongoing supply side structural reforms in China. We also present a dual model of by-production technology for shadow price analysis and report upward trended carbon abatement costs in Chinese agriculture.

Key Words

Environmental Efficiency ; Chinese Agriculture ; Structural Efficiency ; Mix Efficiency ; Carbon Shadow Prices

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