Market-Oriented Reforms and China’s Green Economic Development: An Empirical Study Based on Stochastic Frontier Analysis

The expanding of market-oriented reforms (MORs) over the past 40 years has provided steady momentum for China’s rapid economic growth. Based on the balanced panel data of 28 Chinese provinces from 1985–2015, an empirical analysis using stochastic frontier analysis was conducted to examine the impacts of MORs on the evolution of China’s green economic development. Energy efficiency is used to evaluate the degree of China’s green economic development. Results demonstrated that the average level of provincial energy efficiency was relatively low and the deviation of real energy efficiency from the optimal efficiency frontier was approximately 58%. This indicated China’s energy resources were extensively utilized. Provincial energy efficiency evolved dynamically in line with the degree of marketization. The MORs were the driving force of the improvements in China’s energy efficiency, and provided strong institutional support for China’s future green economy development.