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Potential Green Gains From the Integration of Economies: Evidence From Mainland, Hong Kong, Macao, and Taiwan in China

Potential Green Gains From the Integration of Economies: Evidence From Mainland, Hong Kong, Macao, and Taiwan in China

Zhiyang Shen, Yiqiao Zhou, Kaixuan Bai, Kun Zhai
Copyright: © 2022 |Volume: 30 |Issue: 6 |Pages: 21
ISSN: 1062-7375|EISSN: 1533-7995|EISBN13: 9781668425206|DOI: 10.4018/JGIM.302654
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MLA

Shen, Zhiyang, et al. "Potential Green Gains From the Integration of Economies: Evidence From Mainland, Hong Kong, Macao, and Taiwan in China." JGIM vol.30, no.6 2022: pp.1-21. http://doi.org/10.4018/JGIM.302654

APA

Shen, Z., Zhou, Y., Bai, K., & Zhai, K. (2022). Potential Green Gains From the Integration of Economies: Evidence From Mainland, Hong Kong, Macao, and Taiwan in China. Journal of Global Information Management (JGIM), 30(6), 1-21. http://doi.org/10.4018/JGIM.302654

Chicago

Shen, Zhiyang, et al. "Potential Green Gains From the Integration of Economies: Evidence From Mainland, Hong Kong, Macao, and Taiwan in China," Journal of Global Information Management (JGIM) 30, no.6: 1-21. http://doi.org/10.4018/JGIM.302654

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Abstract

The integration of economies always attracts much attention from policymakers and researchers. This paper introduces a novel approach to evaluate potential economic and environmental gains from integrating economies. Based on aggregate production technology and directional distance functions, we regard all decision-making units as a whole, allowing free resource reallocation among units. The level of resource misallocation is identified by a structural measure, which is obtained by the difference between overall potential improvement and individual technical inefficiency. Taking China as an empirical example, possible economic output expansions are estimated at 43.2% and 10.1% under convex and nonconvex production technologies, respectively; potential pollution reductions are around 28.4% and 5.1% under convex and nonconvex production technologies, respectively. A significant disparity of structural inefficiencies is detected, indicating a high level of resource misallocation in China. Economic cooperation is vital to promote potential green gains for all provinces in China.