Nineteenth International Conference on Interdisciplinary Social Sciences

Abstract

Using 2010 to 2017 provincial data on China, this paper is the first to compare conventional technical efficiency (TE) that does not consider carbon emissions and green TE which takes carbon emissions into account. This is done using an improved version of the the two-stage double bootstrap Data Envelopment Analysis to explicitly model carbon emissions as an undesirable output to analyse green economic growth for the first time. The adopted model also addresses major shortcomings in previous studies. New evidence shows that the conventional and green TE rankings may be similar but there are variations in the intertemporal trends of China’s provinces, regions and clusters. In addition, there are differences in the determinants of the two TEs. For example, although urbanisation improves both TEs, its role is overestimated in conventional TE gains while the service sector share has no role in conventional TE gains unlike green TE. This highlights the importance of the industry structure (i.e., the share of service sector) in sustainable economic growth when carbon emissions are accounted for, a result that was masked when conventional TE was analysed. Our results further show that provinces with similar urbanisation rate can have differences in green TE in part due to green TE also being driven by the GDP share of services. The study cautions that varying strategies for different provinces, regions and clusters is necessary for a “win-win” green transformation towards sustainable economic growth.