Sustainability performance analysis of environment innovation systems using a two-stage network DEA model with shared resources

The term environmental innovation system refers to an innovation network composed of enterprises, universities, and research institutions involved in the development and diffusion of environmental technology, with the participation of a government. An environmental innovation system not only exerts important impact on the achievement of carbon neutrality but also affects social and economic activities. Investigations on environmental innovation system performance constantly assume a single-stage independent system while ignoring its internal structure. However, such systems are composed of environmental innovation research and development (R&D) and environmental innovation conversion subsystems. A two-stage data envelopment analysis (DEA) model is developed in this study to analyze the efficiency of Chinese regional environmental innovation system by opening the "black box" and considering shared resources. Empirical results indicated that China presents high overall environmental innovation efficiency although some regions need to improve. Regions with low efficiencies in both environmental innovation R&D (EIR) and environmental innovation conversion (EIC) subsystems should expand their investment in and strengthen the management of environmental innovation resources. Regions with low EIR efficiency should improve the absorption and transformation of environmental innovation achievements. Regions with low EIC efficiency should increase investment in the commercialization of environmental innovation achievements and encourage green economy industries, such as new energy, art, tourism, and environmental protection. Keywords data envelopment analysis, environmental efficiency, environmental innovation system, shared esources, two-stage structure