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Safety and environmental inputs investment effect analysis: Empirical study of selected coal mining firms in China

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  • Dzonzi-Undi, Junice
  • Li, Shixiang

Abstract

This study uses 2007–2012 panel data of 51 out of 100 top Chinese coal mining firms to calculate total factor productivity (TFP) and technical efficiency (EF) using Malmquist index. The study further examines the effects of safety, cleaner production investment and technological progress (represented by research and development (R&D) input variable) on industry's efficiency using Stochastic Frontier Analysis method (SFA). Results show that: (1) during the sample period, the average TFP of coal industry was relatively steady while the EF deteriorated; (2) larger coal firms have higher TFP and EF than smaller ones; (3) Technological progress has positive significant affects on EF, while safety and cleaner production inputs and the intersection of both factors separately exerts negative impacts on EF. Conclusions and recommendations are then made that: (1) if the main focus of coal industry's policy and regulation is on embracing short-term improvements in EF and adopting market mechanisms, then safety and cleaner production investment will be left out (2) focus should be on encouraging long- term increases in safety and cleaner production investments, while providing coal firms with step by step guidance on this investment; in order to avoid negative effects abrupt increases my exert on industry's EF and enable production through realistic economic means. (3) Short term focus should be on leading larger coal firms to increase technological changes so as to improve EF in the short run. (4) Moderation of the largest firms operations should be considered in order to maximize EF through technological progress.

Suggested Citation

  • Dzonzi-Undi, Junice & Li, Shixiang, 2016. "Safety and environmental inputs investment effect analysis: Empirical study of selected coal mining firms in China," Resources Policy, Elsevier, vol. 47(C), pages 178-186.
    • Handle: RePEc:eee:jrpoli:v:47:y:2016:i:c:p:178-186
    DOI: 10.1016/j.resourpol.2016.02.002
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    Cited by:

    1. Wang, Yuxin & Fu, Gui & Lyu, Qian & Wu, Yali & Jia, Qinsong & Yang, Xiaoyu & Li, Xiao, 2022. "Reform and development of coal mine safety in China: An analysis from government supervision, technical equipment, and miner education," Resources Policy, Elsevier, vol. 77(C).
    2. Yu, Haimiao & Chen, Hong & Long, Ruyin, 2017. "Mental fatigue, cognitive bias and safety paradox in chinese coal mines," Resources Policy, Elsevier, vol. 52(C), pages 165-172.
    3. Wu, Yunna & Xiao, Xinli & Song, Zongyun, 2017. "Competitiveness analysis of coal industry in China: A diamond model study," Resources Policy, Elsevier, vol. 52(C), pages 39-53.

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