Environmental Efficiency Analysis of Listed Cement Enterprises in China

Fang Zhang, Hong Fang, JunJie Wu and Damian Ward
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Fang Zhang: School of Economics and Management, Beihang University, Beijing 10191, China
Hong Fang: School of Economics and Management, Beihang University, Beijing 10191, China
Damian Ward: Business School, University of Hertfordshire, Hatfield AL10 9EU, UK

Sustainability, 2016, vol. 8, issue 5, 1-19

Abstract: China’s cement production has been the highest worldwide for decades and contributes significant environmental pollution. Using a non-radical DEA model with slacks-based measure (SBM), this paper analyzes the environmental efficiency of China’s listed cement companies. The results suggest that the average mean of the environmental efficiency for the listed cement enterprises shows a decreasing trend in 2012 and 2013. There is a significant imbalance in environmental efficiency in these firms ranging from very low to very high. Further investigation finds that enterprise size and property structure are key factors. Increasing production concentration and decreasing the share of government investment could improve the environmental efficiency. The findings also suggest that effectively monitoring pollution products can improve environmental efficiency quickly, whereas pursuit for excessive profitability without keeping the same pace in energy saving would cause a sharp drop in environmental efficiency. Based on these findings, we proposed that companies in the Chinese cement sector might consider restructuring to improve environmental efficiency. They also need to make a trade-off between profitability and environmental protection. Finally, the Chinese government should reduce ownership control and management interventions in cement companies.

Keywords: environmental efficiency; China; listed cement companies; Slack Based Model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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