The difference and convergence of total factor productivity of inter-provincial water resources in China based on three- stage DEA-Malmquist index model

Abstract

Abstract A three-stage DEA-Malmquist index method was used to measure and analyze the total factor productivity and its decomposition index of provincial water resources in China from 2008 to 2015. The results showed that the total factor productivity and its decomposition index of inter-provincial water resources in China have changed significantly after ruling out external environmental factors and random error factors: the total factor productivity increased by 7.9% annually; technical efficiency index increased by 4.7% per year and the average annual growth rate of the technical progress index reached 3.1%. Technical efficiency is a main growth driver for the total factor productivity of provincial water resources in China. Sub-regionally, annual growth rate of the total factor productivity of water resources in Western China was 10%, which is higher than that of the whole country and that of Eastern and Central China. Technical progress index in Eastern China increased by 4.8% per year for index decomposition of total factor productivity, and it is higher than that of the whole country and the Central and Western China. Besides, technical efficiency of Western China with an increased by 8.2% per year is higher than that of the whole country and the Eastern and Central China. The adjusted total factor productivity was tested for σ convergence and β convergence. The test results showed that there was no σ convergence nor conditional β convergence in the total factor productivity, but there was significant absolute β convergence, indicating that the gap in total factor productivity gap of water resources between all provinces in China is narrowing and eventually converging to the same steady state equilibrium level. The growth of the total factor productivity of water resources in China has not yet reached maturity. Hence, its suitable conditional convergence path has not been found yet.