Resources Policy xxx (xxxx) xxx–xxx

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Resources Policy
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Green total factor productivity of China's mining and quarrying industry:

A global data envelopment analysis
⁎
Xuehong Zhua,b, Ying Chena,b, Chao Fenga,b,
a
School of Business, Central South University, Changsha 410083, China
b
Institute of Metal Resources Strategy, Central South University, Changsha 410083, China

A R T I C L E I N F O A B S T R A C T

Keywords: China's mining and quarrying industry is characterized by “high pollution, high energy consumption, and high
DEA emissions.” Improving this sector's green total factor productivity (TFP) is of great importance for furthering the
Technological progress sustainable development of China's economy. Using a global data envelopment analysis (DEA), this paper
Green TFP analyzes the green TFP of China's mining and quarrying industry for the period of 1991–2014 with regard to
China
technology, scale, and management. The following results are found. First, during the sample period, the green
TFP of China's mining and quarrying industry increased by 71.7%. Technological progress was the most im-
portant contributor, and the decline in scale efficiency and management efficiency were two inhibitors.
Fortunately, in recent years, management efficiency has gradually improved and become a new impetus for
green TFP growth. Second, the characteristics of the green TFPs in the sub-industries vary considerably. During
the sample period, the green TFPs of the mining and processing of ferrous metal ores (MPFMO), the mining and
processing of non-ferrous metal ores (MPNFMO), and the mining and processing of nonmetal ores (MPNO) grew
rapidly and became the benchmarks, whereas those of the mining and washing of coal (MWC) and the extraction
of petroleum and natural gas (EPNG) remained very low. Third, the returns to scale of the sub-industries also
varied. EPNG, MPNFMO, MPNO were in the stage of increasing returns to scale or constant returns to scale
during the entire period, whereas MWC and MPFMO have recently entered the stage of decreasing returns to
scale.

1. Introduction Thus, the aim of this paper is to investigate the characteristics of

Energy and minerals are vital factors for social and economic de-
velopment, especially in the context of China's urbanization and in-
dustrialization. However, the depletion of resources and severe en-
vironmental problems call for a greener development mode in all walks
of life, especially in the mining and quarrying industry, which is the
fundamental sector of China's industrial economy. As shown in Fig. 1,
the mining and quarrying industry took up an increasing share of both
industrial output and China's gross domestic product (GDP) from 1991
to 2014, and in Fig. 2, it can be seen that the final energy consumption
of the mining and quarrying industry rose by 4.77% annually from
1991 to 2014, with an annual growth of 4.35% in CO2 emissions. In
addition, according to the China Statistical Yearbook 2015, energy in-
tensity in the mining and quarrying industry was 0.19 t of standard coal
equivalent per ten thousand yuan at current prices in 2014, which was
far beyond the nation's average level. To some extent, the above facts
indicate that the rapid development of China's mining and quarrying
industry is driven by an extensive mode.
green total factor productivity (TFP) using global data envelopment
analysis (DEA). This paper's main contributions are as follows. First, it
establishes slacks-based global DEA models to calculate the green TFP
of the mining and quarrying industry. These models can help identify
the features and the changing trends of the mining and quarrying in-
dustry's green TFP from 1991 to 2014. Second, this paper decomposes
changes in green TFP by using the global Malmquist (GM) index. This
decomposition can help identify the key factors responsible for green
TFP changes in the mining and quarrying industry. Third, this paper
reveals the returns to scale, the input redundancy, the output in-
sufficiency, and the over-emissions of the sub-industries of the mining
and quarrying industry. This information is meaningful for determining
the path to improving the green TFP in China's mining and quarrying
industry.
The rest of this paper's framework is organized as follows. Section 2
is a review of the available literature. Section 3 illustrates the methods
used in this paper. The slacks-based global DEA models used to calcu-
late the green TFP are introduced in 3.2, and a decomposition of the

⁎
Corresponding author at: School of Business, Central South University, Changsha 410083, China.
E-mail address: littlefc@126.com (C. Feng).

https://doi.org/10.1016/j.resourpol.2017.12.009
Received 7 August 2017; Received in revised form 27 October 2017; Accepted 28 December 2017
0301-4207/ © 2018 Elsevier Ltd. All rights reserved.

Please cite this article as: Zhu, X., Resources Policy (2018), https://doi.org/10.1016/j.resourpol.2017.12.009
X. Zhu et al.
700000
mining and quarrying output
industrial output
GDP
600000
mining and quarrying output/industrial output
mining and quarrying output/GDP
Unit: 100 million RMB yuan
500000
400000
300000
200000
100000
0 0.00
green TFP by using the GM index is described in 3.3. In Section 4,
variable selection and data resources of the empirical study in this
paper are described in detail. Section 5 presents and discusses the
empirical results. Conclusions and corresponding policy implications
are provided in Section 6.
2. Literature review
Total factor productivity (TFP) is a useful tool for measuring eco-
nomic sustainability (Krugman, 1994; Prescott, 1998; Hulten, 2001).
Numerous scholars have explored sustainability-related issues in
countries or industries based on TFP. The literature divides the methods
for measuring TFP into two categories: parametric methods and non-
parametric methods. Parametric methods mainly consist of the esti-
mation of classical or stochastic cost and production functions (Aigner
et al., 1977; Lin and Wang, 2014; Shabanzadeh-Khoshrody et al., 2016),
whereas nonparametric methods mainly refer to DEA. Superior to
parametric methods, DEA methods do not require setting the functional
form of the model in advance and can take various inputs and outputs
into consideration (Johnes, 2006). Thus, an increasing number of
scholars have applied DEA to measure productivity and efficiency
(Zhou et al., 2008).
For example, using DEA, Krüger (2003) measured the TFP of 83
countries from 1960 to 1990, and the results showed that the TFP of
most of the country groups (except Asia) decreased after 1973. Barros
2
Resources Policy xxx (xxxx) xxx–xxx
0.35 Fig. 1. Changing trends in the proportion of China's mining and
quarrying output as a share of industry output and GDP. Data
resource: the China Statistical Yearbook (1992–2015).
0.30
0.25
0.20
0.15
0.10
0.05
Fig. 2. Energy consumption and CO2 emissions of China's mining
and quarrying industry from 1991 to 2014. Data resource: the
China Statistical Yearbook (1992–2015).
and Alves (2004) applied DEA to analyze the TFP of Portugal's publicly
owned hotel chain for the period 1999–2001 and found that few hotels
achieved TFP improvement during that period. Coelli and Rao (2005)
examined the agricultural TFP in 93 developed and developing coun-
tries from 1980 to 2000 based on DEA and found that Asia was the
leading performer, with 2.9% annual TFP growth, whereas Africa was
the worst performer, with only 0.6% annual TFP growth. Abbott (2006)
estimated the TFP of the Australian electricity supply industry through
the DEA Malmquist approach, and the results indicated that the TFP of
the industry had been increasing since the mid-1980s. Lin and Liu
(2012) calculated China's TFP using an output-oriented DEA and then
decomposed the TFP of each year into technological progress and ef-
ficiency change. Other TFP-based studies have also been summarized
by Beveren (2012).
One common feature of the above studies is that they simply ig-
nored byproducts/undesirable outputs (e.g., CO2 emissions). Thus, their
estimations may be biased (Jaffe et al., 2005; Kumar, 2006; Li and Lin,
2015). To overcome this defect, an increasing number of scholars have
attempted to incorporate byproducts/undesirable outputs into the total
factor framework. For instance, treating SO2 emissions as the undesir-
able output, Yaisawarng and Klein (1994) measured the green TFP and
explored the effects of SO2 controls on the change in the productivity of
the American electric power industry. Cao (2007) treated environ-
mental damage as the undesirable output to measure the green TFP
growth of China's manufacturing sectors. Incorporating CO2 emissions
X. Zhu et al. Resources Policy xxx (xxxx) xxx–xxx

into the TFP framework, Ahmed (2012), Du et al. (2014) and Rusiawan measuring the green TFP under the assumption of constant returns to
et al. (2015) studied the green TFPs of five Southeast Asian countries scale (CRS) is defined as follows:
and three East Asian countries, China, and Indonesia, respectively. sx
1
Considering CO2 emissions and environmental pollutants, Wang and ⎧ 1 − ∑im= 1 i
m xi0
⎪ greenTFP = ρ* = min y
Feng (2015) explored energy, environmental, and economic efficiency ⎪ 1 ⎛ s1 sγ sc ⎞
1+ ∑ + ∑τs2= 1 τ ⎟
and productivity in China. Feng et al. (2017a) investigated the sources s1 + s2 ⎜ γ = 1 yγ 0 cτ 0
⎨ ⎝ ⎠
of China's productivity growth from 2000–2013 by incorporating CO2 ⎪ s. t . Xλ +s x ≤ x 0 ; Yλ − s y ≥ y0 ; Cλ +s c = c0;
emissions into growth acounting model. ⎪ s x , s y , sc , λ ≥ 0; m , s , s = 1, ... ,N
⎩ 1 2 (3)
To the best of our knowledge, no study has explored the sustain-
ability-related issues specific to China's mining and quarrying industry where ρ* denotes the green TFP of a DMU under the assumption of CRS;
from a green TFP perspective. Considering the mining and quarrying six , s γy and s τc represent the slack variable of input i, desirable output γ
industry's supporting role in China's industry and its extensive char- and undesirable output τ , respectively; x i0 , yγ0 and c τ0 represent the
acteristics, it is critical to explore the evolution of its green TFP and value of input i, desirable output γ and undesirable output τ , respec-
determine the key motivators guiding its continued sustainable devel- tively; X , Y and C are matrices that represent the value of the input,
opment. Therefore, this paper attempts to explore the green TFP of desirable output and undesirable output, respectively, for all N DMUs;
China's mining and quarrying industry. A slacks-based global DEA was and λ is the value of the intensity variable for connecting the inputs and
used for green TFP measurements, and the GM index was applied to outputs with a convex combination.
identify the factors responsible for green TFP changes. Eq. (3) can also be written as Eq. (4):
Sx
⎧ greenTFP = ϕ* = min μ − 1 ∑im= 1 i
3. Methodology m xi0
⎪
⎪ 1 s1 Sγy s2 Sγc
⎪ s. t . μ + s1 + s2 ⎛∑γ = 1 yγ 0 + ∑τ = 1 c γ 0 ⎞ = 1; XΛ + S ≤ x 0 μ;
x
DEA is a nonparametric tool for the measurement of efficiency or ⎪ ⎝ ⎠
productivity. This paper applied a slacks-based global DEA method for YΛ − S y ≥ y0 μ; CΛ + S C = c0 μ; S x , S y, S C , Λ ≥ 0;
⎨
assessing the green TFP of the mining and quarrying industry and its ⎪μ = 1
;
y
sub-industries in China. First, the concept of global DEA is briefly de- ⎪ 1 ⎛ s1 sγ sc ⎞
1+ ∑ + ∑τs2= 1 τ ⎟
⎪ s1 + s2 ⎜ γ = 1 yγ 0 cτ 0
scribed in Section 3.1. Second, a slacks-based measure for green TFP is ⎝ ⎠
⎪ x x y y c c
introduced in Section 3.2. Third, a GM index for decomposing green ⎩ S = μs , S = μs , S = μs , Λ = μλ (4)
TFP changes is shown in Section 3.3. The assumption of CRS indicates that producers can linearly scale
the inputs and outputs without increasing or decreasing efficiency,
3.1. The concept of global DEA while in reality, inputs and outputs are unlikely to be increasing or
decreasing in the same ratio. Thus, this paper offers a variable returns
To make estimations among different data points in the sample to scale (VRS) model, which allows returns to scale to change along
period consistent and comparable, this paper utilized global DEA to with different scales. The VRS model is as follows:
measure the green TFP of China's mining and quarrying industry.
Sx
Following Pastor and Lovell (2005), the concept of global DEA is in- ⎧ greenTFP = ϕ* = min μ − 1 ∑im= 1 i
m xi0
troduced in this paper. Two definitions of benchmark technology—- ⎪
⎪ 1 s1 Sγy s2 Sγc
contemporaneous benchmark technology and global benchmark tech- ⎛
s. t . μ + s + s ∑γ = 1 y + ∑τ = 1 c ⎞ = 1; XΛ + S x ≤ x 0 μ;
1 2 γ0
nology—are introduced in this section. ⎨ ⎝ γ0 ⎠
⎪ δYΛ − S y ≥ y0 μ; δCΛ + S C = c0 μ; ∑ Λ = 1;
Contemporaneous benchmark technology is defined as follows: ⎪ x y C
P t (x t ) = {(y t , c t ) x t canproduce(y t , c t )} (1) ⎩ μ, S , S , S , Λ ≥ 0; 0 ≤ δ ≤ 1; m, s1, s2 = 1, ... ,N (5)
where ϕ* denotes the green TFP of a DMU under the assumption of VRS.
where x denotes the amount of input to each decision-making unit
The difference between Eq. (4) and Eq. (5) is that a constraint, ∑ Λ = 1,
(DMU), y is the desirable output and c is the undesirable output pro-
is added in Eq. (5) to reveal the variability in returns to scale.
duced by each DMU, and P (x ) represents the production possibility set
Eq. (5) can also be transferred into Eq. (6) below:
(PPS). In Eq. (1), t = 1,…,T. In addition, the reference PPS constructed
by this equation is contemporaneous at time t, which means that the set Sx
⎧ greenTFP = ϕ* = min μ − 1 ∑im= 1 i
m xi0
is made from observations only at specific time t. ⎪
Global benchmark technology is introduced as follows: ⎪ 1 s Sγy s Sγc
⎪ s. t . μ + ⎛∑γ = 1
1
+ ∑τ = 1 c ⎞ = 1;
2
s1 + s2 yγ 0 γ0
⎨ ⎝ ⎠
P G = P1 ∪ P 2 ∪ ... ∪PT (2)
⎪ X (Λ′ + Λ′ ′ ) + S x ≤ x 0 μ; YΛ′ − S y ≥ y0 μ; CΛ′ + S C = c0 μ;
This global benchmark technology envelopes all contemporaneous ⎪
⎪∑ (Λ′ + Λ′ ′ ) = 1;μ, S x , S y, S C , Λ′ , Λ′ ′ ≥ 0; m , s1, s2 = 1, ... ,N (6)
benchmark technologies by building a single reference PPS from the ⎩
panel data of all inputs and outputs for relative DMUs. Thus, the con-
sistency and comparability of green TFPs among different data points 3.3. The global Malmquist index for decomposing green TFP changes
are achieved in this way.
The DEA Malmquist index proposed by Färe et al. (1994) has been
3.2. Slacks-based measure of the green TFP widely used to identify the factors responsible for changes in efficiency
or productivity. Combining the concept of global DEA and the slacks-
To measure and determine the evolution of the green TFPs of the based measure, following Wang et al. (2014), this paper proposed a
mining and quarrying industry and its sub-industries from 1991 to global Malmquist (GM) index for decomposing green TFP changes as
2014, slacks-based global DEA models were used to calculate these follows:
values; these methods are introduced in this section. The model for

3
X. Zhu et al.
TFP G (x t + 1, y t + 1 , c t + 1 CRS ) TFP G (x t , y t , c t CRS ) ⎤ ⎡ TFP t + 1 (x t + 1, y t + 1 , c t + 1 CRS ) TFP t (x t , y t , c t CRS ) ⎤
GM t , t + 1 (x t , y t , c t , x t + 1, y t + 1 , c t + 1 CRS ) = ⎡
⎣ ⎥ ⎢
⎢ TFP t + 1 (x t + 1, y t + 1 , c t + 1 CRS ) TFP t (x t , y t , c t CRS ) ⎦
t + 1
TFP (x , y , c VRS )
× = GTCH t , t + 1 × GSCH t . t + 1 × GPCH t , t + 1
TFP t (x t , y t , c t VRS )
where TFP G (x t , y t , c t CRS ) is defined on the global benchmark tech-
nology set P G under the assumption of CRS; TFP t (x t , y t , c t CRS ) is de-
fined based on the contemporaneous benchmark technology set P t
under the assumption of CRS; and TFP t (x t , y t , c t VRS ) is defined based
on the contemporaneous benchmark technology set P t under the as-
sumption of VRS. The GM index in Eq. (7) is decomposed into three
parts: technological efficiency change (GTCH), scale efficiency change
(GSCH) and management efficiency change (GPCH). Here, if the GM
index, GTCH, GSCH and GPCH are greater than, equal to, or less than 1,
then the relative efficiency is increasing, stable, or decreasing, respec-
tively, from period t to period t + 1.
4. Variable selection and data resources
4.1. Input and output variable selection
There are numerous inputs (e.g., labor, capital, energy, water, non-
energy resources) and outputs (e.g., economic output, CO2 emissions,
waste water, waste gases, solid waste) in the production process, all of
which can be treated as either input factors or output factors for eval-
uating the green TFP. However, it is impossible to incorporate all these
factors into the empirical model. Thus, a selection of input and output
variables is necessary.
In the existing literature, the selections of input and output variables
are quite varied. For example, Chung et al. (1997) chose capital, labor,
wood fiber and energy as inputs, and output pulp, biological oxygen
demand, chemical oxygen demand, and suspended solids as outputs to
calculate the green productivity of the Swedish pulp and paper in-
dustry. Hailu and Veeman (2000) selected energy, wood residue,
pulpwood, non-wood materials, production labor, administration labor,
and capital as inputs, and net pulp output, newsprint, other papers,
paperboard, BOD, TSS to investigate the green TFP of the Canadian
pulp and paper industry. Zhang et al. (2011), Ahmed (2012), and Shen
et al. (2015) chose capital and labor force as the inputs and GDP, in-
tegrated environmental factors and CO2 emissions as outputs. Zhao
et al. (2015) selected labor, concentrated feed, piglet weight, material
and service fee as inputs and net output of main product, output value
of byproducts, chemical oxygen demands, total nitrogen, total phos-
phorus, CH₄ and N₂O as outputs for measuring the green TFP of hog
breeding.
In general, the selection of variables depends on the availability of
data (Rusiawan et al., 2015), and the focus of the research (Feng et al.,
2017b). It can be found that when measuring green TFPs, capital stock,
labor force and energy consumption are three common inputs, and
gross output and CO2 emissions discharged by energy consumption are
the most common desirable and undesirable outputs, respectively, used
in DEA-based studies (e.g., Kumar, 2006; Lin et al., 2013; Chen and
Golley, 2014; Du et al., 2014; Li and Lin, 2015; Li and Lin, 2016; Shao
et al., 2016). Because the purpose of this study is to investigate the
green TFP of the mining and quarrying industry, following the existing
green TFP studies, capital stock, labor force and energy consumption
are chosen as the inputs, whereas gross output and CO2 emissions are
chosen as the desirable output and the undesirable output, respectively.
4.2. Data resources
Considering the availability of the data and the statistical calibers,
this paper selects data from 1991 to 2014 for the five main sub-
Resources Policy xxx (xxxx) xxx–xxx
/ × /
t+1 t+1 t+1 t+1 t t
⎣ TFP (x , y , c VRS ) TFP (x , y , c VRS ) ⎦
t t ⎥
t + 1
t + 1 t + 1
(7)
industries of China's mining and quarrying industry, which are the
mining and washing of coal (MWC), the extraction of petroleum and
natural gas (EPNG), the mining and processing of ferrous metal ores
(MPFMO), the mining and processing of non-ferrous metal ores
(MPNFMO), and the mining and processing of nonmetal ores (MPNO).
To measure the green TFP of China's mining and quarrying industry,
which is calculated by DEA, following Chen and Golley (2014), Chen
(2015), Li and Lin (2015), and Li and Lin (2016), this paper uses capital
stock (K), labor force (L), and energy consumption (E) as inputs, while
industrial gross output value (Y) and CO2 emissions (C) are used as the
desirable and undesirable outputs, respectively.
(1) Capital stock. Because capital stock data cannot be obtained di-
rectly from statistical yearbooks, this paper calculates the capital
stock of each sub-industry using a perpetual inventory method ac-
cording to Hall and Jones (1999). The equation is as follows:
It
Kt = + (1 − δ ) × Kt − 1
Pt (8)
where Kt , It , Pt and δ represent the capital stock, investment in fixed
assets, price index for investment in fixed assets and depreciation
rate at time t, respectively, and Kt − 1 represents the capital stock at
time t−1. The data for investment in fixed assets and their price
indexes are collected from the China Statistical Yearbook
(1992–2015). This paper uses the year 1990 as the base period. The
capital stock of the base period K 0 is calculated as follows:
I0
K0 =
(g + δ ) (9)
where I0 , g and δ denote the investment in fixed assets in 1990, the
average growth rate of industrial output from 1990 to 2000, and the
depreciation rate in 1990, respectively.
Because data for the depreciation rate cannot be obtained directly,
following Chen and Golley (2014), the depreciation rate is calcu-
lated as follows:
Dt
δ=
FAt − 1 (10)
where Dt and FAt − 1 represent the depreciation at time t and the
original value of fixed assets at time t-1, respectively. The data on
the depreciation and the original value of fixed assets can be ob-
tained from the China Energy Statistical Yearbook (1992–2015).
(2) Labor force. The data for the labor force come from the China
Statistical Yearbook (1992–2015). Because the data for the labor
force in 1995 and 1998 are incomplete, we applied a linear inter-
polation method to supplement the missing values.
(3) Energy consumption. The energy consumption of the mining and
quarrying industry encompasses total final energy consumption,
and the value of energy consumption is converted into ten thousand
tons of standard coal based on the standard coal coefficient of each
kind of energy. The data for the total final energy consumption and
the standard coal coefficient come from the China Energy Statistical
Yearbook (1992–2015).
(4) Industrial gross output. Industrial gross output is chosen as the
proxy of the desirable output and is converted into 1990 prices
using the accumulated index of producer prices for industrial pro-
ducts. Industrial gross output and the index of producer prices for
industrial products of each sub-industry come from the China
Statistical Yearbook (1992–2015).
4
X. Zhu et al. Resources Policy xxx (xxxx) xxx–xxx

Table 1 mining and quarrying industry and its sub-industries from 1991 to
The descriptive statistics of inputs and outputs for the mining and quarrying industry. 2014. The changing trend of green TFPs for the mining and quarrying
industry (MQ) and its sub-industries are shown in Fig. 3. These sub-
Index Units Observations Min Max. Mean Std. Dev
industries include the mining and washing of coal (MWC), the extrac-
K 100 million 120 76.96 11286.05 2047.96 2555.64 tion of petroleum and natural gas (EPNG), the mining and processing of
yuan ferrous metal ores (MPFMO), the mining and processing of non-ferrous
L 10,000 120 24.15 631.19 152.21 179.20
metal ores (MPNFMO), and the mining and processing of nonmetal ores
employees
E 10,000 t 120 172.64 7279.99 1492.37 1611.44 (MPNO).
Y 100 million 120 37.02 5091.05 841.01 1005.26 As shown in Fig. 3, the green TFP of the mining and quarrying in-
yuan dustry increased stably but slowly from 1991 to 2014. However, the
C 10,000 t 120 24.15 631.19 152.21 179.20 changing trend of green TFPs in sub-industries varied. The green TFP of
MWC increased steadily but at a relatively low level from 1991 to 2014.
The green TFP of EPNG decreased and stayed at much lower levels than
those of other sub-industries in the mining and quarrying industry from
(5) CO2 emissions. Following Wang and Feng (2017a), the data for CO2 1991 to 2014. The green TFPs of MPFMO, MPNFMO and MPNO in-
emissions in this paper include both direct and indirect CO2 emis- creased overall from 1991 to 2014, and these three sub-industries have
sions. The CO2 emissions directly discharged by fossil energy con- become leaders in the green TFP of the mining and quarrying industry
sumption are estimated according to the method suggested by the since 2007. In general, the green TFPs of the mining and quarrying
Intergovernmental Panel on Climate Change (IPCC, 2006). The CO2 industry and its sub-industries (except for EPNG) increased during the
emissions indirectly discharged by electricity are estimated in two sample period.
steps: first, the electricity consumption is converted into fossil en-
ergy consumption according to the data for China's energy balance 5.2. The decomposition analysis of the green TFP change
from the China Statistical Yearbook (1992–2015); and second, the
indirect CO2 emissions are calculated using fossil energy con- After the analysis on the changing trend of the green TFPs in Section
sumption converted from the first step by the method suggested by 5.1, a GM analysis of the green TFPs was performed to comprehensively
the IPCC. reveal the factors that are key to the growth of the green TFP and un-
cover the gains and losses of the mining and quarrying industry during
The descriptive statistics for the inputs and outputs are shown in the sample period. In addition, to reveal the overall and periodical
Table 1: characteristics of the green TFP changes in the mining and quarrying
industry, the results of green TFP changes and its decompositions from
5. Empirical results and discussion 1991 to 2014, and during the three stages are shown in Tables 2, 3,
respectively. These three stages are 1991–2000, which covers the 8th
In this section, the changing trend and sub-industrial differences of
green TFP in the mining and quarrying industry are presented in Table 2
Section 5.1. Based on this information, in Section 5.2, a decomposition Global Malmquist indexes and their decomposition of the mining and quarrying industry
and its sub-industries from 1991 to 2014.
analysis of green TFP change via the GM index was employed to
identify the key factors that either promote or inhibit the growth of Industry Green TFP Accumulated GM index and its decomposition from
green TFP during the sample period. Finally, details on the five sub- 1991 to 2014
industries’ returns to scale, input redundancy and output inefficiency
are discussed in Section 5.3.
1991 2014 GM GTCH GSCH GPCH

5.1. The changing trend and sub-industrial differences of green TFP MWC 0.0848 0.2973 3.5063 4.6964 0.7466 1.0000
EPNG 0.1173 0.0763 0.6506 8.5239 0.1739 0.4390
MPFMO 0.1210 1.0000 8.2675 4.5872 1.8023 1.0000
The purpose of this section is to reveal the changing trends and sub-
MPNFMO 0.1616 1.0000 6.1889 6.1889 1.0000 1.0000
industrial differences of the mining and quarrying industry. This dis- MPNO 0.2057 1.0000 4.8614 4.8614 1.0000 1.0000
cussion could provide insights into the evolution of the green TFP in MQ 0.3005 0.5159 1.7170 2.3515 0.8523 0.8567
these industries. Thus, using the slacks-based global DEA model in-
troduced in Section 3, this paper calculates the annual green TFP of the

1 Fig. 3. Changing trends of green TFP in China's mining and

quarrying industry and its five sub-industries.
0.9
0.8
0.7
Green TFP

0.6
0.5
0.4
0.3
0.2
0.1
0

MQ MWC EPNG MPFMO MPNFMO MPNO

5
X. Zhu et al. Resources Policy xxx (xxxx) xxx–xxx

Table 3
The periodic analysis of Global Malmquist indexes and their decomposition of the mining and quarrying industry and its sub-industries.

Industry Green TFP Accumulated GM index and its Green TFP Accumulated GM index and its Green TFP Accumulated GM index and its
decomposition during 1991–2000 decomposition during 2001–2010 decomposition during 2010–2014

1991 2000 GM GTCH GSCH GPCH 2001 2010 GM GTCH GSCH GPCH 2010 2014 GM GTCH GSCH GPCH

MWC 0.08 0.10 1.18 3.08 0.38 1.00 0.11 0.24 2.15 1.52 1.41 1.00 0.26 0.30 1.13 0.94 1.20 1.00
EPNG 0.12 0.09 0.77 0.77 1.00 1.00 0.08 0.07 0.86 2.73 0.29 1.07 0.07 0.08 1.03 1.00 0.69 1.50
MPFMO 0.12 0.22 1.78 2.63 0.68 1.00 0.24 0.70 2.97 1.58 2.32 0.81 0.70 1.00 1.42 1.00 1.07 1.33
MPNFMO 0.16 0.52 3.23 3.23 1.00 1.00 0.53 0.81 1.52 1.52 1.00 1.00 0.78 1.00 1.28 1.28 1.00 1.00
MPNO 0.21 0.39 1.90 1.90 1.00 1.00 0.41 1.00 2.44 2.44 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00
MQ 0.30 0.32 1.06 1.18 0.90 1.00 0.32 0.43 1.35 1.21 0.98 1.13 0.45 0.52 1.15 1.02 1.05 1.07

and 9th Five-Year Plan; 2001–2010, which covers the 10th and 11th
Five-Year Plan; and 2011–2014, which covers the first four years in the
12th Five-Year Plan.
As shown in Table 2, the green TFP of the mining and quarrying
industry increased (accumulated GM = 1.7170 > 1) from 1991 to
2014. Technological progress (accumulated GTCH = 2.3515 > 1) was
the most powerful contributor to the growth of the green TFP in the
mining and quarrying industry, while the decline in scale efficiency
(GSCH = 0.8523 < 1) and management efficiency (GPCH =
0.8567 < 1) were two obstacles hampering the growth of green TFP in
the mining and quarrying industry. However, differences exist in the
decomposition results of sub-industries. Technological progress (all
accumulated GTCH > 1) was the contributor, scale efficiency regress
(accumulated GSCH < 1) in MWC, EPNG was the inhibitor, and scale
efficiency progress (accumulated GSCH > 1) in MPFMO was the con-
tributor to the growth of green TFP. Referring to the existing literature,
technological progress is a main contributor to the development of TFP
(Zhou et al., 2017). According to Fig. 4, research and development (R&
D) investment and technicians in the mining and quarrying industry
increased rapidly from 1991 to 2014, except for a decline after the fi-
nancial crisis of 2008, indicating that the mining and quarrying in-
dustry has made efforts to promote technological progress and in-
novation, and these efforts have achieved some positive results (Wang
and Feng, 2017b). However, the investment-driven mode has already
curbed scale efficiency in the mining and quarrying industry. Moreover,
because of the dominant position of state-owned enterprises, manage-
ment inefficiency is commonly seen in the mining and quarrying in-
dustry.
As is shown in Table 3, technological progress (accumulated
GTCH > 1) promoted the growth of green TFPs in the mining and
quarrying industry during 1991–2000, 2001–2010 and 2011–2014.
Scale efficiency regress (accumulated GSCH < 1) inhibited the growth
of green TFP in the mining and quarrying industry during 1991–2000
and 2001–2010. However, the scale efficiency was gradually improved
and become an impetus (accumulated GSCH = 1.05 > 1) of the growth
of green TFP during 2011–2014. In addition, we are surprised to learn
that management efficiency progress (accumulated GPCH > 1) has
become a new contributor to the growth of green TFP since 2001. Since
the 10th Five-Year Plan (2001–2005), the government has issued a
series of policies for the sustainable development of the mining and
quarrying industry (partially presented in Table 4) and these mea-
surements pushed the industries to improve their production tech-
nology. Moreover, with the promotion of the market economy and the
state-owned enterprise reform, the management efficiency of the
mining and quarrying industry started to make progress and accelerated
the growth of green TFP in the sector.
In general, technological progress was the main contributor re-
sponsible for the green TFP growth of the mining and quarrying in-
dustry. From the perspective of the entire sample period (i.e.,
1991–2014), the decline in scale efficiency and management efficiency
were two inhibitors of the growth of green TFP in the mining and
quarrying industry. Luckily, management efficiency has improved and
become a new impetus of the growth of green TFP in recent years.
5.3. Scale benefit analysis and input redundancy and output inefficiency
analysis
In this section, a scale benefit analysis is described to demonstrate
the annual change in the returns to scale of the five sub-industries of the
mining and quarrying industry. In addition, the input redundancy and
output inefficiency of the sub-industries will be discussed. As shown in
Table 5, MWC had already entered the stage of decreasing returns to
scale since 2008. This finding indicates that if the inputs of MWC in-
creased, the growth rate of outputs will be less than that of inputs.

40 4.5 Fig. 4. Accumulated change of the mining and quarrying in-

R&D Investment Technicians dustry's R&D investment and Technicians. Note: R&D investment-
35 4.0 primary axis, technicians-secondary axis. Data resource: the
China Statistical Yearbook (1992–2015).
3.5
30
3.0
25
2.5
20
2.0
15
1.5
10
1.0

5 0.5

0 0.0

6
X. Zhu et al. Resources Policy xxx (xxxx) xxx–xxx

Table 4
Documents issued by the Chinese government related to the sustainable development of the mining and quarrying industry.

Documents Mining and quarrying industry-related contents

The 12th Five-Year Plan (2011–2015)
The 12th Five-Year Plan for Saving and Comprehensively Utilizing
Mineral Resources (2011–2015)
The Industrial Transformation and Upgrade Plan (2011–2015)
The 12th Five-Year Plan for Coal Industry Development (2011–2015)
The 12th Five-Year Plan for Petroleum and Chemical Industry
Development (2011–2015)
The 12th Five-Year Plan for Non-Ferrous Metal Industry
Development (2011–2015)
The National Mineral Resources Plan (2008–2015)
Guide the merger and reorganization of enterprises; strengthen technology innovation; promote the
diversified and clean development of energy; optimize the layout of energy development; etc.
Develop key technology on saving and comprehensively utilizing mineral resources; promote advanced
technology and equipment; etc.
Promote green and low-carbon development in industry; accelerate the development of industrial
aggregation; adjust and optimize the raw material industry; strictly control the output of the raw material
industry; eliminate backward production capacity; etc.
Promote the merger and reorganization of coal enterprises and develop a large-scale enterprise group;
restrict the number of coal enterprises to less than 4000 and increase the average scale of production to
more than one million tons per year; etc.
For water, one unit of industrial added value consumed decreases by 30%; for energy, one unit of
industrial added value consumed decreases by 20%; for CO₂, one unit of industrial added value
discharged decreases by 17%; etc.
For energy, one unit of industrial added value consumed cumulatively decreases by 18%; for CO₂, one
unit of industrial added value discharged cumulatively decreases by 18% in five years; promote
technology innovation; etc.
Promote large-scale mining of mineral resources; develop a batch of large-sized and medium-sized base of
mineral resources; etc.

Table 5 outputs increased in the same proportion, indicating that the compre-
Annual changes about returns to scale of five sub-industries of the mining and quarrying hensive efficiency of these three sub-industries achieved DEA effec-
industry.
tiveness in 2014. However, the returns to scale of MPFMO decreased
　 MWC EPNG MPFMO MPNFMO MPNO from 2012 to 2013. This finding shows a strong sign that without in-
dustrial adjustment, MPFMO will probably experience a decreasing
1991 irs irs irs irs irs trend of returns to scale.
1992 irs irs irs irs irs
To reveal the current sources of production inefficiency at the input-
1993 irs irs irs irs irs
1994 irs irs irs irs –
output factors level, this paper further analyzes the input redundancy,
1995 irs irs irs irs irs output insufficiency, and over-emissions of sub-industries in 2014, as
1996 irs irs irs irs irs shown in Table 6. Because MPFMO, MPNFMO, and MPNO showed no
1997 irs irs irs irs – sign of redundancies in 2014, Table 6 only presents the input re-
1998 irs irs irs irs irs
dundancy, output insufficiency and over-emissions of MWC and EPNG.
1999 irs irs irs irs irs
2000 irs irs irs irs irs According to Table 6, the redundancy rates of energy input, capital
2001 irs irs irs irs irs input, and labor force input in MWC were 0.488, 0.496 and 0.486,
2002 irs irs irs irs irs respectively. The redundancy rates of energy input, capital input, and
2003 irs irs irs irs irs
labor force input in EPNG were 0.656, 0.639 and 0.566, respectively.
2004 irs irs irs irs irs
2005 irs irs irs – irs
These rates indicate that there were wastes of resources in MWC and
2006 irs irs irs irs irs EPNG, and the rate of waste in EPNG was higher than that in MWC. In
2007 irs irs irs irs – addition, the industrial gross output of MWC and EPNG can achieve the
2008 drs irs irs irs – basic goal with the current inputs, which means that the industrial gross
2009 drs irs irs – irs
output will not improve with the current inputs. However, CO2 emis-
2010 drs irs irs irs –
2011 drs irs irs irs – sions in MWC and EPNG exceeded those sub-industries found to be
2012 drs irs drs irs irs technologically efficient by DEA, with 7513.899 and 4544.169 thou-
2013 drs irs drs irs irs sand tons of emissions, respectively.
2014 drs irs – – –
Via the scale benefit analysis and input redundancy and output in-
efficiency analysis, this paper determines that MWC and EPNG were
Note: “irs” means that returns to scale increase; “-” means returns to scale have not
changed; “drs” means that returns to scale decrease. still in scale inefficiency in 2014, and there remains a huge potential for
MWC and EPNG to improve their input efficiencies and reduce CO2
emissions. Furthermore, if MPFMO does not adjust its industrial scale, it
EPNG was at the stage of increasing returns to scale from 1991 to 2014, will probably experience a decreasing trend of returns to scale in the
which means that if all inputs increase in the same ratio, a larger ratio future.
of output will be achieved. MPFMO, MPNFMO and MPNO reached
unchanged returns to scale in 2014, which means that inputs and

Table 6
The analysis of input redundancy, output insufficiency and over-emissions of five sub-industries in 2014.

Sub-Industry Energy input The rate of Capital input The rate of Labor force input The rate of labor Output insufficiency Over emissions of
redundancy energy input redundancy (100 capital input redundancy force input of industrial gross CO₂ emissions
(10,000 tco) redundancy million yuan) redundancy (10,000) redundancy output (100 million (10,000 t)
yuan)

MWC 5502.535 0.488 2800.477 0.496 217.785 0.486 0.000 7513.899

EPNG 6628.394 0.656 2016.518 0.639 43.553 0.566 0.000 4544.169

7
X. Zhu et al.
6. Conclusions and policy implications
In this paper, the green TFPs of the mining and quarrying industry
and its five sub-industries during 1991–2014 were calculated based on
the slacks-based global DEA. Subsequently, a global Malmquist index
was employed to identify the key factors that account for the changes of
green TFP. The results show that during 1991–2014, the green TFP of
the mining and quarrying industry increased from 1991 to 2014 as a
result of technological progress, whereas decline in scale efficiency and
management efficiency inhibited the growth of green TFP. Surprisingly,
management efficiency has recently improved and provided a new
impetus for the growth of green TFP. In addition, the green TFP of MWC
and EPNG were still at a low level and these two sub-industries were in
scale inefficiency and suffering from serious input redundancy and CO2
over emissions. Based on these results, significant policy implications
for the sustainable development of China's mining and quarrying in-
dustry are given as follows.
First, the industry should introduce advanced technology and en-
hance technological innovation. On the one hand, the mining and
quarrying industry should eliminate outdated technology (e.g., high
energy consumption rock lift and transportation technology), and in-
troduce existing applicable and advanced technology (e.g., coke dry
quenching technology) listed in the Promotion Catalogue of Advanced
Applicable Technology in Mineral Resource Conservation and
Comprehensive Utilization, and the Encouraging, Limiting and
Eliminating Technical Directory in Mineral Resource Conservation and
Comprehensive Utilization issued by the Ministry of Land and
Resources. On the other hand, it is necessary to establish the industry-
university-research institution interactive and joint action mechanism.
Besides, the R&D investment of enterprises should be no less than 1% of
the prime operating revenue in the previous year.
Second, strengthening management is an important strategy for
improving the green development of China's mining and quarrying in-
dustry. Realizing process management by means of information tech-
nology and digital control technology can improve the industry's
management efficiency. The management of mining rights is another
powerful tool for the sustainable development of the mining and
quarrying industry. The government should set strict terms of entrance
to the mining rights holders. It should also check the existing mining
rights in stages. In other words, relevant departments regularly inspect
the situations of energy saving, emissions reduction and environmental
governance in mines, and it should cancel the mining permits of un-
qualified mines.
Third, it is important to adjust industrial structure and strictly
control the industrial scale to improve the scale efficiency of the mining
and quarrying industry. For instance, for MWC, which is experiencing
decreasing returns to scale, the government should close small mines
(especially mines whose annual output is less than 300,000 t), and
strictly limit the increased capacity in an administrative manner. In
addition, it is necessary to promote the merger and reorganization of
the preponderant enterprises to improve the industrial concentration.
For EPNG, which is experiencing increasing returns to scale, it is ne-
cessary to moderately release the market so that scale efficiency can be
improved.
Acknowledgements
We gratefully acknowledge financial support from the National
Natural Science Foundation of China (No. 71633006), the National
Social Science Foundation of China (No. 13&ZD169), and the
National Natural Science Foundation of China (No. 71573282).
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