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Measuring capacity utilization under the constraints of energy consumption and CO2 emissions using meta-frontier DEA: A case of China's non-ferrous metal industries

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  • Wang, Miao
  • Feng, Chao

Abstract

Currently, China's non-ferrous metal industry (NMI) still has the problem of overcapacity, measuring its capacity utilization (CU) and revealing its determinants is an important way to resolve the overcapacity problem of China's NMI. Using the panel data of China's 29 NMIs, this paper constructs a meta-frontier data envelopment analysis (DEA) to measure CU by taking into account the energy consumption and CO2 emissions constraints, and decompose the CU into four parts: technical efficiency, technology gap, scale efficiency, and equipment utilization. The main findings indicate that during the period of 2004–2017, the CU of China's NMI is generally low. Non-ferrous metal alloy manufacturing and rolling processing has the highest CU, while non-ferrous metals mining and dressing shows the lowest CU. From the dynamic perspective, mining and dressing experienced CU decrease, while other two sub-industries achieved CU increase. Technical inefficiency and technology gap enlargement are two main barriers of China's NMIs' CU. Besides, among 29 NMIs, there are only ten industries witnessed a CU improvement, while the remaining nineteen industries all experienced decrease of CU. CU and its determinants across China's 29 NMIs are quite different. Thus, the policies to improve CU should be made tailored to each industry's features.

Suggested Citation

  • Wang, Miao & Feng, Chao, 2023. "Measuring capacity utilization under the constraints of energy consumption and CO2 emissions using meta-frontier DEA: A case of China's non-ferrous metal industries," Resources Policy, Elsevier, vol. 80(C).
    • Handle: RePEc:eee:jrpoli:v:80:y:2023:i:c:s0301420722007218
    DOI: 10.1016/j.resourpol.2022.103278
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    1. Wang, Xiaolei & Deng, Renxin & Yang, Yufang, 2023. "The spatiotemporal effect of factor price distortion on capacity utilization in China’s iron and steel industry," Resources Policy, Elsevier, vol. 86(PA).

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