Environmental assessment and investment strategy for China's manufacturing industry: A non-radial DEA based analysis

Manufacturing industry is the pillar industry in China, making China become the world's manufacturing center. While, the rapid development of manufacturing industry in China not only promotes the economic growth, but also consumes lots of resources and generates too much carbon dioxide. To make a sustainable development, this paper adopts a non-radial DEA model with natural and managerial disposability to examine the energy-environmental performance of China's manufacturing industry during the 2006-2014 period. The energy-environmental performance is evaluated by the unified efficiency under natural and managerial disposability (UENM). Additionally, the investment strategy is confirmed by industrial types of damages to return (DTR). The empirical results indicate that the unified efficiencies of most manufacturing industries present a rising trend in the sample interval. Moreover, the unified efficiency of most manufacturing industries in light industry have a little higher value than the efficiency of those in heavy industry. Besides, the light industry presents more investment effect than the heavy industry, and many industries in heavy industry have little potential for investment in terms of developing the green growth. According to these results, China should increase investment and enhancing the R&D input to improve the unified efficiency of light industry. Policy support need focus on boosting innovation in strategic emerging industries instead of traditional manufacturing industries. Part of industries with excess capacity should be transferred to other countries through outbound investment.