A Comparative Analysis of Slack-Based Green Total Factor Productivity in China: a Directional Distance Function

Zhang, Xuping; Chen, Xiang; Lu, Ching-Cheng; Cheng, Fu-Yueh

A Comparative Analysis of Slack-Based Green Total Factor Productivity in China: a Directional Distance Function

2021

Zhang, Xuping | Chen, Xiang | Lu, Ching-Cheng | Cheng, Fu-Yueh

Improving the accuracy of the green total factor productivity (GTFP) calculation has certain theoretical and practical value for sustainable development. We use a slack-based directional distance function (DDF) proposed by Färe and Grosskopf (European Journal of Operational Research 200:320-322, Färe and Grosskopf, European Journal of Operational Research 200:320–322, 2010) to combine with Malmquist-Luenberger Productivity Index (MLPI) to re-examine the GTFP. This new GTFP index takes inputs such as energy consumption, labor, and capital stock into account, while considering the comprehensive outputs of real GDP and three types of industrial wastes (gas, solid, water). The proposed slack-based MLPI is applied to access GTFP changes and compare the results under the slack-based DDF measure and original DDF measure over the period 2005–2012. The primary results in this paper present the average growth of GTFP for these 30 Chinese provinces shows a downward trend until 2010 suggesting that most provinces pay less attention on the productivity growth. The downward trend results primarily from no significant improvement in technical change. We also discover that although the distributions of the slack-based measure are roughly similar with that of the original DDF, the decomposed component, efficiency change, shows a significant difference between them.

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