What Factors Affect the Competiveness of Power Generation Sector in China? An Analysis Based on Game Cross-Efficiency

46 Pages Posted: 4 Apr 2017

See all articles by Bai-Chen Xie

Bai-Chen Xie

Tianjin University - College of Management and Economics

Jie Gao

Fudan University - School of Management

Zhang Shuang

Tianjin University - College of Management and Economics

ZhongXiang Zhang

Tianjin University - Ma Yinchu School of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: April 3, 2017

Abstract

China’s unbundling reform in 2002 aimed to introduce competitiveness into the power industry, especially the generation sector, to improve its operational efficiency. Meanwhile, great concern about a range of environmental problems and global climate change increasingly calls for saving energy and abating emissions. Thus, the ability to balance the reduction of carbon emissions with economic benefits may to a great extent determine the competitiveness of power generation sector. This study first adopts the game cross-efficiency approach to evaluate the environmental efficiency of the generation sectors in China’s 30 provinces. It then employs a system generalized method of moments model to explore the determinants of their performance while eliminating the associated endogeneity problem. The results of this first study combining the two methods indicate that efficiency gaps do exist among the regions even though overall efficiency has been improved. Despite the negative correlation between environmental efficiency and the thermal power ratio, the power mix should be adjusted gradually. The average firm size and capacity utilization rates are positive factors boosting the environmental efficiency. The incentive policies for clean energy development should be differentiated across regions according to their power mix and self-sufficiency ratio.

Keywords: Game Cross-efficiency, Data Envelopment Analysis, Generalized Method of Moments, Power Industry, Environmental Efficiency, China

JEL Classification: Q54, Q55, Q58, Q43, Q48, O13, O44, R11

Suggested Citation

Xie, Bai-Chen and Gao, Jie and Shuang, Zhang and Zhang, ZhongXiang, What Factors Affect the Competiveness of Power Generation Sector in China? An Analysis Based on Game Cross-Efficiency (April 3, 2017). FEEM Working Paper No. 12.2017. Available at SSRN: https://ssrn.com/abstract=2945337 or http://dx.doi.org/10.2139/ssrn.2945337

Bai-Chen Xie

Tianjin University - College of Management and Economics

NO.92 Weijin Road
Nankai District
Tianjin, 300072
China

Jie Gao

Fudan University - School of Management ( email )

No. 670, Guoshun Road
No.670 Guoshun Road
Shanghai, 200433
China

Zhang Shuang

Tianjin University - College of Management and Economics ( email )

25 Zhujiang RD, Hexi District
Tianjin, Tianjin 300222
China

ZhongXiang Zhang (Contact Author)

Tianjin University - Ma Yinchu School of Economics ( email )

92 Weijin Road, Nankai District
Tianjin 300072
China
+86 22 87370560 (Phone)

HOME PAGE: http://ideas.repec.org/f/pzh243.html

Register to save articles to
your library

Register

Paper statistics

Downloads
21
Abstract Views
258
PlumX Metrics