Strategic Environmental Assessment of Land Transportation: An Application of DEA with Undesirable Output Approach

The efficiency of land transportation contributes significantly to determining a country’s economic and environmental sustainability. The examination of land transportation efficiency encompasses performance and environmental efficiency to improve system performance and citizen satisfaction. Evaluating the efficiency of land transportation is a vital process to improve operation efficiency, decrease investment costs, save energy, reduce greenhouse gas emissions, and enhance environmental protection. There are many methods for measuring transportation efficiency, but few papers have used the input and output data to evaluate the ecological efficiency of land transportation. This research focuses on evaluating the environmental efficiency for land transportation by using the data envelopment analysis (DEA) method with undesirable output to handle unwanted data. By using this, the paper aims to measure the performance of land transportation in 25 Organization for Economic Co-operation and Development (OECD) countries in the period of 2015–2019, considered as 25 decision-making units (DMUs) in the model. For identifying the ranking of DMUs, four inputs (infrastructure investment and maintenance, length of transport routes, labor force, and energy consumption) are considered. At the same time, the outputs consist of freight transport and passenger transport as desirable outputs and carbon dioxide emission (CO2) as an undesirable output. The proposed model effectively determines the environment-efficient DMUs in a very time-efficient manner. Managerial implications of the study provide further insight into the investigated measures and offer recommendations for improving the environmental efficiency of land transportation in OECD countries.

Ecological Efficiency of Urban Industrial Land in Metropolitan Areas: Evidence from China

Industrial land is an indispensable strategic resource in urban development that plays an indispensable role in ensuring the industrial space of urban construction and development. Measuring and analyzing the eco-efficiency of industrial land utilization (ECILU) can provide insights into how to maximize the input–output ratio of industrial land and ensure the sustainable development of land resources and economies. Based on the undesirable output slacks-based measure (SBM) model, choosing land, capital, and labor as input indicators, and the industrial added value and carbon emissions as desirable and undesirable output indicators, this study measured the ECILUs in 78 cities and 13 metropolitan areas in four Chinese major economic zones from 2007 to 2018, analyzed their spatial and temporal evolution characteristics and regional differences, and constructed a Tobit regression model to test the influence mechanism of each variable on the ECILUs in different regions. This has important theoretical and practical significance for the Chinese government in formulating relevant policies and realizing the green utilization of urban land in the future. Empirical results showed that the ECILUs in most cities were low and that the differences between regions were large. The ECILU in the Western Economic Zone was relatively high, followed by the Eastern, Central, and Northeastern Economic Zones. According to the ECILU value and urban synergy degree of each metropolitan area, this study divided the 13 metropolitan areas into four categories. The regression analysis results showed that the variables had different effects on the ECILUs of all cities and the four economic zones in China. It is suggested that all economic zones should reinforce the optimization of industrial structure, control industrial pollutant discharge, and solve the phenomenon of labor surplus. The Eastern Zone should maintain the growth of its economy while focusing on soil quality. The Central Zone should focus on the efficient use of infrastructure, and the Western, Northeastern, and Central Zones should balance the green coverage area and the industrial land area to ensure the efficient use of urban industrial land.

Evaluation and Influence of Chinese Enterprises' Financial Efficiency Based on the Malmquist Index

This paper introduces a superefficiency financial efficiency model with undesirable output based on the features that the output of industrial enterprises contains desirable output as well as undesirable output. Furthermore, the Malmquist index model is constructed for financial efficiency dynamic study, and the spatial Durbin model is constructed for evaluation and impact of enterprises. According to the financial data of Chinese enterprises from 2007 to 2019, this paper evaluates the financial efficiency of Chinese interprovincial industrial enterprises dynamically and measures the influence levels of major impacts on the financial efficiency of Chinese interprovincial industrial enterprises quantitatively. As reported by this paper, the conclusions are as follows: (1) In reference to the financial efficiency dynamic study analysis, there is an obvious growth trend in the financial efficiency of Chinese interprovincial industrial enterprises in different years. Based on the horizontal analysis of financial efficiency, there is a relatively large gap in financial efficiency among Chinese interprovincial industrial enterprises. (2) From the separation factors of financial efficiency analysis, the main factor affecting the growth of the financial efficiency of Chinese industrial enterprises is the modification of technology, and the modification of technical efficiency has a minor impact. (3) In accordance with the impacts of enterprise efficiency analysis, several major factors influence the financial efficiency of Chinese industrial enterprises such as major business cost, operating profit, total liabilities, national capital, and the number of R&D personnel.

Productive Efficiency and Non-performing Assets of Indian Banks in the Post-global Financial Crisis Period

This study endeavours to augment the existing literature on the productive efficiency of Indian domestic banks in the presence of non-performing assets (NPAs), by employing the Weighted Russell Directional Distance Model (WRDDM). Following the intermediation approach, the banking technology set includes three inputs, three desirable outputs and one undesirable output, namely NPAs. Due to their inherent technological heterogeneity, public sector banks (PSBs) and private banks (PVBs) have been analysed as separate groups. Balanced panels of 26 PSBs and 18 PVBs are constructed from 2010-2011 to 2016-2017. The results indicate a considerable scope of improvement in the productive performance of both categories of banks. The break-up of overall inefficiency into input- and output-specific components reveals some stimulating information. For PSBs, the inefficiencies primarily result due to physical capital, while for PVBs they emerge mainly from other incomes. However, NPAs are also a key contributor to inefficiency for both the categories of banks. The inefficiency scores also indicate that, across ownership categories, medium-sized banks are poorer performers than their smaller and larger counterparts. JEL: C14, C61, D24, G21

Technical Efficiency and Productivity Change in the European Union with Undesirable Output Considered

Global competition and climate change are changing the nature of economic activity and impose the urgent need to have environmentally sensitive productivity growth. The paper addresses both desirable and undesirable output to assess technical efficiency and productivity changes, as well as evaluate the importance of an energy input in the production function and productivity change differentials in the European Union (EU) over the period 2000–2018. To that end, it uses output-oriented data envelopment analysis and Malmquist productivity analysis. The results reveal that the EU is facing significant challenges due to a decreasing trend in technical efficiency and slow productivity growth. The absence of major improvements in human resource performance has reduced the benefits of technological innovations which are the main source of productivity growth. Additionally, the results show that energy use did not critically influence efficiency and productivity.

Assessing the impact of global financial crisis on the intermediation efficiency of Indian banks in the presence of non-performing loans

PurposeBy incorporating the role of nonperforming loans (NPLs), the study aims to assess the impact of global financial crisis (GFC) on the intermediation efficiency of Indian banks for the period of 1998/99 to 2016/17.Design/methodology/approachTo obtain efficiency level of Indian banks, this study applied sequential data envelopment analysis (DEA) based directional distance function (DDF) approach, which performed simultaneous expansion of desirable output and reduction of undesirable output in the bank's loan production structure. Additionally, using fixed effect regression approach in the panel data framework, this study assesses both the phenomenon of σ- and unconditional β-efficiency convergence in public sector banks (PSBs), private banks (PBs), foreign banks (FBs) and overall scheduled commercial banks (SCBs) during the pre-crisis, crisis and post-crisis years in India.FindingsIrrespective of the bank's production model, the evidence suggests that the accounting NPLs as an undesirable output significantly deteriorating the intermediation technical efficiency levels of Indian banks, especially after the crisis years until the last year of the study period. This reflects that Indian banks failed more to achieve their financial intermediation objective in the post-crisis years as compared to the crisis and pre-crisis years. In-depth, statistical evidence of commercial bank ownership groups reveals that public sector banks exhibit a higher level of efficiency in pursuance of traditional loan-based activity followed by private and foreign banks. The study also found the existence of sigma convergence in technical efficiency levels of Indian banks and ownership groups as well.Originality/valueThis study is perhaps the first one, which present the robust evolution of Indian banks intermediation efficiency by taking into account both endogenous (i.e. NPLs as an undesirable output and equity as a quasi-fixed input in the bank production process) crisis and exogenous (i.e. global financial and economic stress) crises. Moreover, none of the existing studies have conducted sub-period wise analysis to show the apparent occurrence of both convergence properties in technical efficiency, adding novelty in the literature.

Production and scale efficiency of South African water utilities: the case of water boards

South Africa is a water scarce country with deteriorating water resources. Faced with tight fiscal and water resource constraints, water utilities would have to adopt technically efficient water management technologies to meet developmental socio-economic objectives of universal coverage, aligned to the United Nation's Sustainable Development Goal 6. It is important to measure the technical efficiency of utilities as accurately as possible in order to inform policy. We do this by using a non-parametric method known as Data Envelopment Analysis to determine, measure, analyse and benchmark the technical efficiency of all water boards in South Africa. Our contribution to the literature is twofold: This is the first paper to model technical efficiency of water boards as utility suppliers and guardians of water services in South Africa, and second, we address the over- and underestimation issues of technical efficiency measurement in the water sector. We do this by modelling one of the most pronounced negative externalities from water provision (water losses) as an undesirable output using the approach developed by You & Yan. We find, on average, technical efficiency of water boards is 49%, with only three of the nine water boards technically efficient. Six of the smaller water boards showed high levels of inefficiency with an inefficiency rate of 51%, which is equivalent to wastage in expenditure of R3.7 billion. Six water boards operate at increasing returns to scale and two are scale efficient. Only Rand and Sedibeng water boards exhibited decreasing returns to scale. Therefore, redirecting potential efficiency savings to optimal uses could result in technical and scale efficiency for the sector. Scale efficiency results seem to support larger regional water boards as small- to medium-sized water boards are scale inefficient with low technical efficiency. For example, Amatola Water (small water board) with an efficiency score of only 16% has a total expenditure of 18% of that of Umgeni (large water board), but sells only 6.7% of the quantity sold by Umgeni. Amatola also has seven times the proportion of water losses compared with Umgeni and charges 1.6 times the tariff of Umgeni. The ratio model with an undesirable output outperforms previous methods to deal with undesirable (bad) outputs, which either provide an over- or underestimation of technical efficiency.

Environmental Efficiency Evaluation in the Top Asian Economies: An Application of DEA

Sustainable development has become a global catchphrase in the recent development age. This leads to the growth of various methodologies in evaluating environmental efficiency, such as the Data Envelopment Analysis (DEA) method. The purpose of this study is to propose an extended DEA model, i.e., the undesirable output model, in measuring the relative eco-efficiency scores across nations. The study collected the data of inputs, namely bad outputs and good outputs of the top 20 Asian economies in the period of 2005–2019, and then estimated the environmental efficiency of each country and classified them. The results have shown that there are four nations having higher average environmental efficiency than others. Japan is a good example of sustainable development that simultaneously balances economic development and environmental protection. The study has also discussed possible solutions for improvement to the group of nations with low environmental efficiency. Contributing to applying a novelty extended DEA model, this work recommends a more precise model, taking the weight of outputs into account for further studies.