Abstract
Purpose
The purpose of this paper is to evaluate the total-factor energy efficiency (TFEE) in China’s sugar manufacturing industry using firm-level data from 2002/2003 to 2012/2013 crushing seasons, and further explore the determinants of TFEE.
Design/methodology/approach
Modified data envelopment analysis is used to measure the TFEE of each sugar mill during the crushing seasons. Then heteroskedastic fractional probit model is applied to estimate the determinants of TFEE because of the bounded nature of TFEE and heteroskedasticity of unbalanced panel.
Findings
The results show that throughout the crushing seasons, the average TFEE is 0.57; there are spatial differences of TFEE in Guangxi sugar industry, highest in southern area; the TFEE of foreign-owned sugar mills is larger than that of private-owned and state-owned sugar mills; the larger the enterprise size, the higher the TFEE; private ownership, large size, raw material, safe productivity, total recovery rate as well as technical progress can improve TFEE significantly.
Originality/value
This paper analyzes TFEE using a rich data set at firm level, allowing the existence of firm heterogeneity, as well as being complementary to the study of energy efficiency in China’s sugar industry. Moreover, ownership structure is involved in the determinants of TFEE, which is rarely done in literature. Lastly, heteroskedastic fractional probit model is employed to recognize the bounded nature of TFEE as well as selection bias of unbalanced panel to study the determinants of TFEE.
Keywords
Acknowledgements
JEL Classification —D24, O13
This research is supported by National Natural Sciences Foundation of China (No. 71303236); A Foundation for the Author of National Excellent Doctoral Dissertation of PR China (FANEDD) (No. 200983). The authors thank Weiming Tian, Zhangyue Zhou and Ivan Kandilov for their advice.
Citation
Ru, L. and Si, W. (2015), "Total-factor energy efficiency in China’s sugar manufacturing industry", China Agricultural Economic Review, Vol. 7 No. 3, pp. 360-373. https://doi.org/10.1108/CAER-11-2014-0131
Publisher
:Emerald Group Publishing Limited
Copyright © 2015, Emerald Group Publishing Limited