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| An empirical study on the effect of environmental regulation on total factor energy efficiency——Decomposition verification based on Potter hypothesis |
| WANG Teng1,2, YAN Liang1,2, HE Jian-hua2, ZHENG Shi-gang2 |
1. Research Center of Resources and Environmental Economics, China University of Geosciences (Wuhan), Wuhan 430074, China;
2. School of Economics and Management, China University of Geosciences (Wuhan), Wuhan 430074, China |
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Abstract The total factor energy efficiency of China's 30provincial administrative regions during 2000~2014was estimated based on DEA-Malmquist index. Then the total factor energy efficiency was decomposed into technical level, pure technical efficiency and scale efficiency. To testify the Potter hypothesis, the panel threshold regression model was adopted to simulate the environmental regulation on total factor energy efficiency, technical level, scale efficiency and pure technical efficiency. Results showed that technical level regression constituted a major cause for the decline of total factor energy efficiency in China. Environmental regulation exerted a negative influence on the scale efficiency, indicating Potter hypothesis as invalid. Single threshold existed between environmental regulation and pure technical efficiency, and there was a positive impact at different intervals, revealing the existence of Porter hypothesis. The impact of environmental regulation on total factor energy efficiency and technical level was positive when the environmental regulation was less than 0.0002, and the Porter hypothesis was correspondingly valid. Otherwise, it didn't stand. Therefore, government should formulate environmental regulation policy after considering varied effect on technical level, pure technical efficiency and scale efficiency.
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Received: 26 July 2016
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