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Measuring unified efficiency of fossil fuel power plants across provinces in China: An analysis based on non-radial directional distance functions

Aijun Li (), Aizhen Zhang, Huijie Huang and Xin Yao

Energy, 2018, vol. 152, issue C, 549-561

Abstract: The static unified efficiency indices are not good at tracking unified efficiency changes across time. To this end, this study adopts Meta-frontier Malmquist unified efficiency indices (MMUEI). These dynamic indices have three important features: (1) They provide us with accurate and credible results of efficiency changes originated from a time effect. (2) They can measure unified efficiency resulting from different benchmark frontiers (i.e. group and meta frontiers). (3) Through these decomposed indicators, this study can uncover and identify the major sources of unified efficiency changes. As an empirical application, the above indices are utilized for examining fossil fuel power plants in 30 provinces in China from 2004 to 2012, where all provinces are grouped into two groups. The main findings are summarized as follows. Firstly, MMUEI provide new valuable information relative to UEIs. The time paths of MMUEI form M-shaped curve for both coastal and inland regions. Secondly, different UEIs measure unified efficiency from different perspectives and thus have differentiated time paths. Finally, there are substantial provincial differences in terms of either MMUEI or UEIs, resulting from provincial variations. In the short run, the provinces with large potential should improve unified efficiency measures by “catching-up”.

Keywords: Unified efficiency; Data envelopment analysis (DEA); Meta-frontier non-radial directional distance functions; Group heterogeneity; Environmental assessment (search for similar items in EconPapers)
Date: 2018
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Handle: RePEc:eee:energy:v:152:y:2018:i:c:p:549-561