The average environmental efficiency technique and its application to Chinese provincial panel data.

In this study, we propose average environmental efficiency, a more comprehensive, fair, comparable, and robust environmental efficiency measurement considering all projection directions to the efficient frontier, and then it is used to evaluate the environmental efficiency of Chinese provinces from 2006 to 2017. Furthermore, we investigate the most influential factors of regional environmental efficiency via a feasible generalized least squares regression approach. The empirical results show that only nine Chinese provinces have average environmental efficiency greater than the national average, implying that two-thirds of the provinces still have much room for improvement. Additionally, environmental efficiency disparities exist between provinces and between four larger geographical areas. The east area achieved the best environmental efficiency over the studied period, better than the whole country, followed in order by the west area, central area, and northeast area. Moreover, we find that the energy consumption structure, government intervention, and economic openness significantly and negatively influence regional environmental efficiency. Finally, we provide policy implications in terms of energy consumption structure optimization, government supervision, and foreign investment introduction while considering the local conditions in different provinces.