systems

Article
A Slacks-Based Measure Model for Computing Game
Cross-Efficiency
Tingyang Huang 1 , Shuangjie Li 1 , Fang Liu 1, * and Hongyu Diao 1,2

1 School of Economics and Management, Beijing University of Technology, Beijing 100124, China;
[email protected] (T.H.); [email protected] (S.L.); [email protected] (H.D.)
2 China Information Security Research Institute, Beijing 102209, China
* Correspondence: [email protected]

Abstract: This paper introduces an improved slack-based game cross-efficiency measurement model
that enhances the existing cross-efficiency framework and integrates it with the Data Envelopment
Analysis (DEA) game cross-efficiency. The model ensures the fairness of its results through the
implementation of a more stringent selection of frontier face weights. It accounts for the competitive
relationships among Decision Making Units (DMUs), achieving a Nash equilibrium solution through
continuous iterations. Furthermore, the model accounts for undesirable outputs and various strategic
orientations, enhancing its applicability. The model’s effectiveness is validated through comparative
analyses of diverse case studies. Additionally, the model’s practical utility is demonstrated through
the analysis of industrial data from various Chinese provinces between 2010 and 2019. Analysis
results show that the proposed model measures production efficiency with greater precision and
comparability than alternative models.

Keywords: data envelopment analysis; slacks-based measure; game cross-efficiency; energy efficiency

1. Introduction
Data envelopment analysis (DEA) is a popular technique used for measuring efficiency.
Citation: Huang, T.; Li, S.; Liu, F.; Numerous scholars utilize the DEA model to analyze industries, manufacturing sectors,
Diao, H. A Slacks-Based Measure
energy, resource allocation, and various other fields. However, the traditional DEA model
Model for Computing Game
encounters some issues when measuring efficiency. Initially, numerous decision-making
Cross-Efficiency. Systems 2024, 12, 78.
units (DMUs) attain an efficiency score of one, rendering them incomparable and thus,
https://doi.org/10.3390/
incomplete for ranking purposes. Furthermore, in the traditional DEA model, each decision-
systems12030078
making unit selects a weight optimizing its benefits, which leads to the overestimation of
Academic Editor: Fernando De la efficiency scores for certain units.
Prieta Pintado The DEA cross-efficiency approach emerges as a robust tool, facilitating the compara-
Received: 22 January 2024
tive evaluation of decision-making units. This approach allows decision-making units to
Revised: 15 February 2024
employ evaluations from other units to ascertain cross-evaluation efficiency. By averaging
Accepted: 24 February 2024 the self-evaluated efficiency and cross-evaluation efficiency, the approach is able to provide
Published: 29 February 2024 a final cross-efficiency for the evaluated decision unit, thus mitigating any exaggeration of
advantages under traditional DEA self-evaluation systems. The advantage of this method
is that it can achieve a fair and complete ordering of all decision units. Additionally, it
avoids the exaggeration of the efficiency scores of decision units. However, the DEA cross-
Copyright: © 2024 by the authors. efficiency approach encompasses several drawbacks [1]. For instance, the optimal weight
Licensee MDPI, Basel, Switzerland. of the decision unit being evaluated may not always be unique, and as a result, the solution
This article is an open access article may not necessarily be unique. Moreover, the application of diverse calculation software
distributed under the terms and can lead to variations in cross-efficiency calculations, potentially culminating in inaccurate
conditions of the Creative Commons final cross-efficiency values. Overall, the DEA cross-efficiency approach can serve as a
Attribution (CC BY) license (https://
highly effective means of evaluating decision units, but it is important to recognize and
creativecommons.org/licenses/by/
address its limitations in order to optimize its use.
4.0/).

Systems 2024, 12, 78. https://doi.org/10.3390/systems12030078 https://www.mdpi.com/journal/systems

Systems 2024, 12, 78 2 of 26

The current cross-efficiency models include the traditional model [1] and the slacks-
based measure (SBM) cross-efficiency model proposed by Kao and Liu [2]. In comparison to
the traditional DEA model, the SBM model provides enhanced advantages by incorporating
the slack variables of each input and output factor directly into the objective function.
Numerous DEA applications reveal the presence of either direct or indirect competition
among the studied DMUs. Indeed, competition is intrinsically present in scenarios where
DMUs vie for limited funding. In large corporations, research and development (R&D)
project proposals submitted by various departments enter into competition due to financial
limitations. These proposals can be regarded as DMUs for the purpose of DEA, enabling the
evaluation and selection of the most viable project proposals within budgetary constraints.
DEA analyses in the literature concerning banks and bank branches often exemplify indirect
competition. Specifically, corporate management, assessing subsidiary branch efficiency,
focuses on underperforming branches, possibly leading to closures or consolidations.
Similarly, these observations apply to fiscally constrained institutions, like hospitals and
schools, competing for national or provincial funding.
Liang et al. introduced a game cross-efficiency model, employing non-cooperative
game theory to scrutinize the competitive dynamics among DMUs [3]. This model provides
a solution for dealing with competition between decision units. The approach concep-
tualizes decision units as participants within the game, regarding their cross-efficiency
values as the respective gains. Liang’s model enhances the collective cross-efficiency among
decision units, concurrently optimizing the efficiency of the unit under evaluation. This
approach not only elevates the evaluated unit’s cross-efficiency but also its individual
efficiency value. The unique solution obtained by this method is the game cross-efficiency
of the decision unit.
In summary, despite the ongoing optimization of DEA models, gaps persist in current
cross-efficiency and game cross-efficiency models. Kao and Liu’s cross-efficiency model
requires further refinement, notably in tightening constraints and incorporating undesirable
outputs. Liang et al.’s game cross-efficiency approach, grounded in the traditional CCR
framework, omits an SBM-based game cross-efficiency variant. This paper addresses this
critical gap by proposing a novel approach. We develop an SBM game cross-efficiency
model, enhancing the SBM framework and integrating game cross-efficiency concepts. We
construct the SBM cross-game non-oriented, input-oriented, and output-oriented mod-
els. The non-oriented model simultaneously accounts for inputs and outputs. It aligns
with the objectives of synchronizing economic development, energy conservation, and
emissions reduction. The input-oriented model’s objective function focuses on cost mini-
mization, making it suitable for the “energy conservation” orientation. The output-oriented
model emphasizes output maximization, making it suitable for the “economic growth and
emissions reduction” orientation. Upon verifying model effectiveness with case data, we
applied these models to industrial data from Chinese provinces (2010–2019). This analysis
revealed shifts in production and energy efficiency within China’s industries.

2. Literature Review
2.1. DEA Model for Cross-Efficiency
DEA is a model used to evaluate the relative efficiency of a set of DMUs. It was
first proposed by Charnes et al. [4] as a method for assessing production efficiency, and it
can handle various situations where each decision unit has multiple inputs and outputs,
in contrast to other efficiency measures like stochastic frontier analysis. One prominent
characteristic of this approach is that it enables each DMU to calculate efficiency by selecting
the most favorable weights for inputs and outputs. The resulting efficiency score reflects
the best performance that the DMU can achieve. However, this aspect can also lead to
some shortcomings, such as a focus on the inputs or outputs that favor the DMUs while
completely ignoring the unfavorable factors. This issue may make some inefficient DMUs
appear more efficient than some efficient DMUs in reality.
Systems 2024, 12, 78 3 of 26

Addressing the aforementioned shortcomings, Sexton et al. proposed the cross-

efficiency method [5], in which each DMU maximizes its efficiency using the traditional
DEA model by Charnes et al. [4] and selects a set of optimal weights to evaluate the effi-
ciency of all other DMUs. In this case, each DMU has a set of cross-efficiencies, and their
average value represents the final efficiency score of the DMU. This method was further
extended and applied by Wu et al. [6]. Some approaches select appropriate weights from
alternative options to avoid significant differences between weights, such as Wang [7] using
lower bounds and Wang et al. [8] employing ordered weighted averaging operators.
The cross-efficiency evaluation method introduces a peer evaluation model, making
evaluations more reasonable and often enabling sufficient ranking of DMUs [9]; thus,
it has been extensively studied and applied [10–12]. However, the method calculates
non-unique optimal weights for each DMU, leading to non-unique peer evaluation re-
sults [1]. To address this issue, Doyle and Green [1] first proposed that each DMU, while
ensuring its overall efficiency maximization, establish a Benevolent or Aggressive sec-
ondary objective function to determine a set of optimal weights and then perform peer
evaluations. The Benevolent secondary objective aims to maximize the efficiency of other
DMUs without reducing one’s efficiency, while the Aggressive secondary objective seeks to
minimize the efficiency of other DMUs without reducing one’s efficiency. Subsequently,
various scholars proposed different secondary objective functions to improve the cross-
efficiency evaluation method [6,9,12]. Additionally, in traditional DEA cross-efficiency
models, negative efficiency measurements may occur under variable returns to scale. Lim
and Zhu [13] transformed negative efficiency values into positive ones through coordinate
transformation. Lim [14] introduced the max–min formula for cross-efficiency, where the
secondary objective minimizes (or maximizes) the best (or worst) cross-efficiency of equiva-
lent DMUs. Lin [15] used the range-directional measure proposed by Portela et al. [16] to
calculate efficiency.
Kao and Liu [11] have expanded the Benevolent Secondary Objective Function [1] to
the network structure to define a series of optimal weights for each DMU, then evaluated
the overall and sub-stage efficiencies of DMUs using cross-efficiency evaluation techniques.
Unlike the approach of Kao and Liu [11], Örkcü et al. [17] have devised a set of optimal
weights for each DMU by extending the Neutral Secondary Objective Function [8] to the
network structure to give meaning to each DMU’s indicator as much as possible. Kao
and Liu [2] have extended the cross-efficiency model to the SBM model to overcome the
problems of inconsistent ranking of efficiency values, potential negative efficiency values,
and an inability to realistically assess the efficiency of weakly effective decision units when
dealing with variable returns of scale (VRS) in traditional DEA cross-efficiency.
The DEA cross-efficiency model avoids the exaggeration and unrealistic efficiency
values of evaluated DMUs through mutual evaluation, ensuring the results are authentic
and fair. However, there are certain limitations, including: (1) the optimal weights of
evaluated DMUs may not be unique and can be influenced by calculation software, leading
to non-unique final cross-efficiency values; (2) secondary objective functions possess sub-
jectivity, and evaluation results differ depending on whether a Benevolent or Aggressive
strategy is chosen; (3) due to resource scarcity, there is a degree of competition among
DMUs. Therefore, it is not suitable to evaluate and rank DMUs using the traditional DEA
cross-efficiency model.
A better description of competitive situations can be found in game theory. By intro-
ducing game theory into the DEA model and conducting game-related DEA research, more
insights can be provided for realistic efficiency evaluation.

2.2. DEA Model for Game Cross-Efficiency

At the explanation stage of DEA, a two-person zero-sum game is established to further
elaborate the core concept of DEA and effectively analyze the intrinsic relationship between
game theory and DEA. This stage is derived from the pioneering work of Banker [18], who
introduced an unconstrained two-person zero-sum finite game to give a game-theoretic
Systems 2024, 12, 78 4 of 26

explanation of traditional DEA. The game theoretic analysis of DEA interprets the DEA
efficiency value as the outcome of the competition between the evaluated DMU and the
reference-set DMU. While previous researchers, such as Hao et al. [19], have made sig-
nificant contributions to this area of research, the application of their work, similar to
traditional studies, remains limited. This limitation was only overcome with the introduc-
tion of the DEA Game model by Nakabayashi and Tone [20]. It should be noted that, while
Nakabayashi and Tone’s model only accounted for the game between inputs or outputs, or
the difference between them, Liang et al. [3] proposed the DEA cross-efficiency game to
extend this to the case of the input–output ratio.
Liang et al. [3] have introduced a non-cooperative game among all DMUs to extend
the traditional DEA cross-efficiency model, called the DEA Game Cross-Efficiency model,
in order to further optimize the cross-efficiency. In this model, all DMUs are regarded as
game participants to attain high peer evaluation efficiency. Each participant joins the game
until the game achieves Nash equilibrium. Each DMU can achieve Nash equilibrium by
engaging in the game, and the peer evaluation results in equilibrium yield non-unique cross-
efficiency scores. Notably, the model respects the objective state of each DMU as a “rational
actor” who seeks to establish greater efficiency, leading to non-cooperative competition.
As a result of these benefits, the DEA game cross-efficiency model has been applied to
environmental efficiency assessment [21], energy efficiency assessment [22,23], sports
efficiency assessment [24], fixed cost allocation [25,26], and water efficiency assessment [27].
The efficiency evaluation of decision units should include considerations for mutual
evaluation and competition. Despite the usefulness of DEA, there remain limitations to
its current methodology. Namely, (1) traditional game cross-efficiency models do not
account for the influence of slack allocation and require improvement, (2) SBM models
focus solely on cross-efficiency and disregard competition among decision units, and
(3) the SBM cross-efficiency model of Kao and Liu [2] did not consider the influence of
undesirable output.

3. Model Development
3.1. SBM Cross-Efficiency Model
DEA models are typically divided into two types: the constant returns to scale (CRS)
model and the VRS model. The assumption of CRS pertains to situations in which manufac-
turers are operating at optimal capacity. However, existing constraints, such as imperfect
market competition, government regulations, and limited resources, impede manufacturers
from producing and operating at an optimal scale. Consequently, when measuring relative
efficiency, it is essential to ensure that the evaluated decision units are only compared with
decision units of a similar magnitude and to assess the genuine pure technical efficiency of
VRS cases. Let N represent the number of decision units, each with M inputs and S outputs,
where and represent the i-th input and the r-th output of DMUj , respectively. According
to Tone [28], the specific model of the non-oriented traditional SBM model under VRS
conditions is illustrated below.

1 1 M sid
M Âi=1 xid
⇢dd = min s+
1+ S1 ÂSr=1 yrd
rd
s.t. xid = ÂN
j=1 jd xij + sid ,
N
+
yrd = Â jd yrj srd , (1)
j=1
N
 jd =1
j=1
+
0, sid 0, srd 0,
i = 1, 2, . . . , M; r = 1, 2, . . . , S; j = 1, 2, . . . , N
Systems 2024, 12, 78 5 of 26

+
The sid and srd in the model are the slack variables for the i-th input indicator xid
and the r-th output indicator yrd of DMUd . This model represents the initial stage in
measuring the cross-efficiency of the SBM, and the fractional form can be linearized using
the Charnes–Cooper transformation.
According to Kao and Liu [2], when each decision unit has M inputs and S outputs,
the number of valid decision units contained in the corresponding frontier surface may be
M + S or less than M + S. Therefore, the number of effective decision units required for
the frontier surface should be no more than M + S. The specific proof has been elaborately
discussed in the paper by Kao and Liu [2], and will not be reiterated in this article. Owing
to this conclusion, the frontier surface of the model by Kao et al. adopts the following
setting. Let Z denote the set of valid decision units, and⇣the target
⌘ decision unit on the
hyperplane frontier surface can be expressed as Âj2Z jk xj , yj . For all points j 2
/ Z, it
holds that jk = 0. This condition applies to all benchmark decision units represented by
this group of decision units.

M1 Bj  jk  M1 Bj , j 2 Z, k = 1, 2, . . . , N
(2)
 Bj  M + S
j2Z

where M1 in formula (2) is a predetermined larger constant that is used to determine the
range of values for the target decision unit | jk |. Theoretically, | jk | should not exceed
the ratio of the maximum observed value to the minimum observed value. | jk |  M1
= max xmaxi /xmin
i , i = 1, 2, . . . , M; ymax
r /ymin
r , r = 1, 2, . . . , S . Considering that the target
decision unit on the hyperplane usually cannot exceed 1000 times the input–output ratio of
the effective decision units, it is simpler to set M to 1000 and there is no need to calculate
the ratio. If the optimal solution of | jk | is equal to 1000, it is recommended to employ a
larger M1 value to recalibrate the model and seek solution. In this way, the set of constraints
ensures that there are, at most, M + S valid decision units available to represent the target
values of all decision units.
To measure the SBM cross-efficiency, firstly, we need to measure the relative efficiency
value of decision unit d in the self-assessment case rdd using Equation (1). Secondly, from
the perspective of the decision unit DMUk starting, the cross-efficiency of all decision units
in the VRS case is measured using the model of Kao and Liu [2], and the specific model is
shown in Equation (3).

1 1 M sik
M Âi=1 xik
⇢dk = max s+
1+ S1 ÂSr=1 yrk
✓ ◆ ✓ rk ◆
M s(d) S s(d)+
1 1
s.t. 1 MÂ idxid = ⇢dd 1 + S Â rd
y
i=1 r=1 rd
(d)
xik = Âj2Z jk xij + sik , i = 1, 2, . . . , M, k = 1, 2, . . . , N
(d)+
yrk = Â jk yrj srk , r = 1, 2, . . . , S, k = 1, 2, . . . , N
j2Z
(3)
 jk = 1, k = 1, 2, . . . , N
j2Z
M1 Bj  jk  M1 Bj , j 2 U, k = 1, 2, . . . , N
 Bj  M + S
j2Z
Bj = 0 or 1, j 2 Z
jk unrestricted in sign, j 2 Z,
k = 1, 2, . . . , N, k 6= d

+ (d)
To differentiate the slacks sid and srd associated with different DMUd , we use sik and
(d)+
srk to denote the slacks between the kth DMU and its target on the frontier hyperplane
Systems 2024, 12, 78 6 of 26

constructed from the viewpoint of DMUd for the ith input and rth output, respectively.
(d) (d)+
Additionally, we use sid and srd to denote the slacks between the dth DMU and its
target on the frontier hyperplane constructed from the viewpoint of DMUd for the ith input
and rth output, respectively. ✓ ◆ ✓ ◆
(d) (d)+
1 M sid srd
In Equation (3), the first constraint 1 M Âi=1 xid = rdd 1 + S1 ÂSr=1 yrd is
intended to restrict the choice of the frontier to those that are able to produce an efficiency
score rdd for DMUd . The number of Bj in the equation with a value of 1 will not exceed
(M + S). The decision units corresponding to non-zero jk constitute the frontier surface,
and each decision unit can use this frontier surface to find the objective value for efficiency
measurement. In the optimal case, each term in the objective function is the SBM cross-
efficiency of DMUd .
(d) ⇤
1 M sik
1 M Âi=1 xik
⇢dk = (d)+⇤
(4)
1 S srk
1+ S Âr=1 yrk

The solutions sid⇤ and srd

+⇤ +
denote the optimal solutions of sid and srd on the hyperplane
frontier, respectively. The model is solved repeatedly for each DMUd , d = 1, 2, . . ., N. The
final efficiency of DMUk is the average of rdk obtained from different DMUd , that is:

1 N
N dÂ
⇢k⇤ = ⇢dk (5)
=1

The determination of the cross-efficiency frontier in Equation (3) relies primarily on

Equation (2) for the initial identification of frontier decision units, followed by further
restriction by the first constraint in Equation (3).
This approach presents both benefits and drawbacks. The advantage is that it resolves
the issue of the SBM cross-model potentially yielding negative values. However, the
disadvantage lies in the challenge of selecting a frontier surface that is most favorable for
the decision-making unit’s own measurement. For instance, consider seven DMUs A-G,
with the frontier surface DMU set as Z = {A, B, C, D}. Suppose for DMUe, the frontier
surface DMU set is Ze = {B, C}. In measuring ref by the aforementioned method, the set of
6= 0 ensures { jf 6= 0, j = B, C}. Yet, the specific 6= 0 set could be { jf 6= 0, j = B, C}, or { jf 6=
0, j = A, B, C}, or { jf 6= 0, j = B, C, D}, and so on. Consequently, when measuring efficiency,
a DMU still has a limited range of choices to select the frontier surface that maximizes its
own efficiency.

3.2. A Non-Oriented SBM Game Cross-Efficiency Model with Undesirable Outputs

This article posits that the model by Kao and Liu [2], as mentioned above, can be
further improved. Firstly, regarding the model’s shortcomings, the main issue lies in
evaluating the efficiency of DMUk from the perspective of DMUd . Kao et al.’s approach
involves initially restricting the number of frontier surface DMUs (constraints 5–7 in
Equation (3)), and then further limiting the frontier surface through constraint 1 to achieve
an efficiency of rdd for DMUd . This paper suggests that a similar effect can be achieved,
and the aforementioned shortcomings addressed, by further tightening constraints 5–7.
Secondly, Kao et al.’s model does not account for undesirable outputs, which should be
considered in today’s increasingly environmentally-conscious context. Finally, this article
proposes combining the ideas of Liang et al.’s [3] game cross-efficiency model to improve it
into an SBM game cross-efficiency model.
In the DEA game cross-efficiency model [3], each DMU participates in a one-to-one
game as a player. The strategy of the DMU in each round of the game is to maximize its
own efficiency under the condition that the opponent’s efficiency score is estimated to be
greater than or equal to the result of the last round of the game. The game ends when the
efficiency score of each DMU reaches an equilibrium state.
Systems 2024, 12, 78 7 of 26

The concept of the game cross-efficiency model first involves considering undesirable
outputs when measuring self-assessed efficiency rdd , a model that was already proposed in
Tone [28]. The non-oriented model of SBM with undesirable output is shown below.
1 M sid1
M Âi=1 xid
⇢dd = min 0 g+
1
S1 s
S2 sb
1 r1 d r2 d
1+ S +S @ Âr =1 g + Âr =1 b A
1 2 1 y 2 y
r1 d r2 d
N
s.t. xid = Â jd xij + sid ,
j=1

g N g g+
yr = Â jd yr1 j sr d ,
1d 1
j=1 (6)
N
ybr2 d = Â b
jd yr2 j + sbr2 d ,
j=1
N
 jd =1
j=1
g
0, sid 0, sr 0, sbr2 d 0
1d

i = 1, 2, . . . , M; r1 = 1, 2, . . . , S1 ; r2 = 1, 2, . . . , S2 ; j = 1, 2, . . . , N
g
where output yr is used to denote the r1 -th desirable output of DMUd , and there exists a
1d
total of S1 desirable outputs; output ybr2 d denotes the r2 -th undesirable output of DMUd ,
and there exists a total of S2 undesirable outputs.
Subsequently, this paper proposes improvements to the model by Kao and Liu [2].
As mentioned at the beginning of this section, modifications have been made to the con-
straints. The first constraint of Equation (3) has been removed, and the seventh constraint
of Equation (3) has been tightened. The modified constraint is set as Bj = 1, for j belonging
to Zd , i.e., the frontier surface of DMUd . The advantage of this modification lies in enabling
a more equitable comparison of the efficiency of each DMU. As previously discussed, in
the original equation for measuring ref , the set of jf 6= 0 could be { jf 6= 0, j = B, C}, or { jf
6= 0, j = A, B, C}, or { jf 6= 0, j = B, C, D}. With the modifications proposed in this paper, the
set of jf 6= 0 is { jf 6= 0, j = B, C}. This directly restricts the frontier surface to the vector
BC, ensuring fairness while reducing the number of constraints (by eliminating the first
constraint of Equation (3)). The specific equation is illustrated below.
(d)
1 M sik
1
M Âi=1 xik
⇢tdk = max 0 (d)g+ (d)b
1
s s
1 @ S1 r k S r k
1+ S + S Âr =1 1g +Âr 2=1 2b A
1 2 1 y 2 y
r1 k r2 k
N (d)
s.t. xik = Â jd xij + sik , i = 1, 2, . . . , M, k = 1, 2, . . . , N
j=1

g N g (d)g+
yr = Â jd yr1 j sr , r1 = 1, 2, . . . , S1 , k = 1, 2, . . . , N
1k 1k
j=1
N (d)b
ybr2 k = Â b
jd yr2 j + sr2 k , r2 = 1, 2, . . . , S2 , k = 1, 2, . . . , N
j=1
M1 Bj  jk  M1 Bj , j = 1, 2, . . . , N (7)
 Bj  M + S1 + S2
j2Zd
Bj = 1, j 2 Zd
Bj = 0, j 2
/ Zd

jk unrestricted in sign, j 2 Zd ,
(d) (d)g+ (d)b
sik 0, sr 0, sr 0
1k 2k

k = 1, 2, . . . , N, k 6= d
i = 1, 2, . . . , M; r1 = 1, 2, . . . , S1 ; r2 = 1, 2, . . . , S2 ; j = 1, 2, . . . , N
Systems 2024, 12, 78 8 of 26

To differentiate from slack variables for inputs and desirable and undesirable out-
(d) (d)g+ (d)b
puts of DMUk in the traditional model, we use sik , sr k , and sr k to denote the
1 2
corresponding slack variables when DMUk is evaluated according to the frontier surface
of DMUd .
Building on the previous step, this paper integrates the ideas from the game cross-
efficiency model proposed by Liang et al. [3], resulting in the development of an SBM
game cross-efficiency model that includes undesirable outputs. Initially, it is necessary
to measure the game cross-efficiency of DMUk relative to DMUd . To achieve this, the
following mathematical programming problem can be considered.
(d)
1 M sik
1
M Âi=1 xik
⇢tdk = max 0 (d)g+ (d)b
1
S s s
1 r k S r k
1+ S +S @Âr 1=1 1g +Âr 2=1 2b A
1 2 1 y 2 y
r1 k r2 k
N (d)
s.t. xik = Â jd xij + sik , i = 1, 2, . . . , M, k = 1, 2, . . . , N
j=1
g g (d)g+
yr = ⇢td 1 ÂN
j=1 jd yr1 j sr , r1 = 1, 2, . . . , S1 , k = 1, 2, . . . , N
1k 1k
N (d)b
ybr2 k = ⇢td 1
 b
jd yr2 j + sr2 k , r2 = 1, 2, . . . , S2 , k = 1, 2, . . . , N
j=1
M1 Bj  jk  M1 Bj , j = 1, 2, . . . , N
(8)
 Bj  M + S1 + S2
j2Zd
Bj = 1, j 2 Zd
Bj = 0, j 2
/ Zd

jk unrestricted in sign, j 2 Zd ,
(d) (d)g+ (d)b
sik 0, sr 0, sr 0
1k 2k

k = 1, 2, . . . , N, k 6= d
i = 1, 2, . . . , M; r1 = 1, 2, . . . , S1 ; r2 = 1, 2, . . . , S2 ; j = 1, 2, . . . , N

where the first three constraints are input and output constraints, and ⇢td 1 denotes the game
cross-efficiency obtained in the previous solution. In Equation (8), ⇢td 1  1 and set ⇢0d = 1.
That is, when t = 1, the optimal solution of Equation (7) is a feasible solution for Equation
(8). This means the initial value ⇢1d is the cross-efficiency measured by Equation (7). When
the algorithm eventually converges, ⇢td becomes the average game cross-efficiency value.
For DMUk , Equation (8) will compute n times for each d = 1, 2, . . ., n. For each DMUd ,
DMUk uses the frontier surface of DMUd for computation. Thus, for each DMUk , Equation (8)
represents the game cross-efficiency of DMUk with respect to DMUd . Let ⇢tdk ⇤ be the optimal

solution used in Equation (8). The method to calculate the average game cross-efficiency
for each DMUk is as follows.

1 M sid
1 N t⇤ 1 N 1 M Âi=1 xid
⇢tk⇤ Â (⇢td 1 )
N dÂ
= ⇢ dk = ! (9)
=1
N d=1 S
g+
sr d sb
1+ 1
S1 +S2 Âr11=1 yg1 + ÂSr22=1 yrb2 d
r d
1 r k
2

SBM game cross-efficiency measurement process.

1. Calculate the frontier surface set Zd by using Equation (6).
2. Substitute ⇢tk 1 into Equations (8) and (9) to calculate ⇢td (set⇢0k = 1 and ⇢1k will be the
solution of Equation (7)).
Systems 2024, 12, 78 9 of 26

3. Assume that ✏ is an exceptionally small specific positive value, if the existence

of ⇢tk ⇢tk 1
> ✏ holds, then return to step 2 to continue the cyclic computation; if
for all decision units the ⇢tk ⇢tk 1
 ✏ all hold, then stop the circular computation
and ⇢tk convergence is achieved for the final average game cross-efficiency value. In
general, ✏ takes the value of 0.001.

3.3. SBM Game Cross-Efficiency Models of Input-Oriented and Output-Oriented with

Undesirable Outputs
Considering the different goal orientation, the input-oriented and output-oriented
models are also proposed. Compared with the above undirected model, the calculation
process is mainly different in Equations (6) and (8).

3.3.1. Input-Oriented Model

In the input-oriented model, the self-evaluation efficiency measure model is shown
in Equation (10). When calculating the frontier surface set Zd , Equation (10) will replace
Equation (6).
M s
1
⇢dd = min1 M Â x
id

i=1 id
N
s.t. xid = Â jd xij + sid ,
j=1
g g g+
yr
1d
= ÂN
j=1 jd yr1 j sr d ,
1
N (10)
ybr2 d = Â b
jd yr2 j + sbr2 d ,
j=1
N
 jd =1
j=1
g
0, sid 0, sr 0, sbr2 d 0
1d

i = 1, 2, . . . , M; r1 = 1, 2, . . . , S1 ; r2 = 1, 2, . . . , S2 ; j = 1, 2, . . . , N

Equation (11) will replace Equation (8) when solving the game cross-efficiency cycle.
M s(k)
1
⇢tkd = min1 M Â id
x
i=1 id
N (d)
s.t. xik = Â jd xij + sik , i = 1, 2, . . . , M, k = 1, 2, . . . , N
j=1
g N g (d)g+
yr = ⇢td 1
 jd yr1 j sr , r1 = 1, 2, . . . , S1 , k = 1, 2, . . . , N
1k 1k
j=1
N (d)b
ybr2 k = ⇢td 1
 b
jd yr2 j + sr2 k , r2 = 1, 2, . . . , S2 , k = 1, 2, . . . , N
j=1
M1 Bj  jk  M1 Bj , j = 1, 2, . . . , N
 Bj  M + S1 + S2 (11)
j2Zd
Bj = 1, j 2 Zd
Bj = 0, j 2
/ Zd

jk unrestricted in sign, j 2 Zk ,
(d) (d)g+ (d)b
sik 0, sr 0, sr 0
1k 2k

k = 1, 2, . . . , N, k 6= d
i = 1, 2, . . . , M; r1 = 1, 2, . . . , S1 ; r2 = 1, 2, . . . , S2 ; j = 1, 2, . . . , N
Systems 2024, 12, 78 10 of 26

By applying Equations (10) and (11) to the calculation process of the SBM game
cross-efficiency, the input-oriented cross-efficiency of the SBM game can be calculated.

3.3.2. Output-Oriented Model

In the output-oriented model, the self-evaluation efficiency measure model is shown
in Equation (12). When calculating the frontier surface set Zd , Equation (12) will replace
Equation (6).
g+
!
S1 sr S2 sbr
1 1d 2d
1/⇢dd = max1 + S1 +S2 Â g + Â
yr d ybr
r1 =1 1 r2 = 1 2d
N
s.t. xid = Â jd xij + sid ,
j=1
g g g+
yr
1d
= ÂN
j=1 jd yr1 j sr d ,
1
N (12)
ybr2 d = Â b
jd yr2 j + sbr2 d ,
j=1
N
 jd =1
j=1
g
0, sid 0, sr 0, sbr2 d 0
1d

i = 1, 2, . . . , M; r1 = 1, 2, . . . , S1 ; r2 = 1, 2, . . . , S2 ; j = 1, 2, . . . , N

Equation (13) will replace Equation (8) when solving the game cross-efficiency cycle.
g+
!
S1 sr S2 sbr
1 1d 2d
1/⇢tkd = max1 + S1 +S2 Â g + Â
yr d ybr
r1 = 1 1 r2 =1 2d
N (d)
s.t. xik = Â jd xij + sik , i = 1, 2, . . . , M, k = 1, 2, . . . , N
j=1
g N g (d)g+
yr = ⇢td 1
 jd yr1 j sr , r1 = 1, 2, . . . , S1 , k = 1, 2, . . . , N
1k 1k
j=1
N (d)b
ybr2 k = ⇢td 1
 b
jd yr2 j + sr2 k , r2 = 1, 2, . . . , S2 , k = 1, 2, . . . , N
j=1
M1 Bj  jk  M1 Bj , j = 1, 2, . . . , N
(13)
 Bj  M + S1 + S2
j2Zd
Bj = 1, j 2 Zd
Bj = 0, j 2
/ Zd

jk unrestricted in sign, j 2 Zk ,
(d) (d)g+ (d)b
sik 0, sr 0, sr 0
1k 2k

k = 1, 2, . . . , N, k 6= d
i = 1, 2, . . . , M; r1 = 1, 2, . . . , S1 ; r2 = 1, 2, . . . , S2 ; j = 1, 2, . . . , N

By applying Equations (12) and (13) to the calculation process of the SBM game
cross-efficiency, the output-oriented cross-efficiency of the SBM game can be calculated.

3.4. Model Convergence Proof

The following theorem illustrates that, in the process of calculating the average
game cross-efficiency using the aforementioned algorithm, the following characteristics
are observed:
Systems 2024, 12, 78 11 of 26

1. All data points of ⇢tj lie between ⇢1j and ⇢2j .

2. All points with even t are non-increasing.
3. All points with odd t are non-decreasing.

Theorem 1. Let rj t be the average SBM game cross-efficiency value defined by Equations (8) and
(9). Let rj 1 be the average SBM cross-efficiency value defined by Equation (7). For any t = 2, 3, . . .
and j = 1, 2, . . ., n, we have
1. rtj r1j
2. r2j r4j ... r2t
j
2
r2t
j r2t
j
1
. . . r3j r1j

Proof of Theorem 1. ⇣ ⌘
1 N t 1
1 N
(1) Equations (8) and (9) can be expressed as ⇢tj = t
N Âd=1 f ⇢d , j , mean-
N Âd=1 ⇢dj =
ing ⇢tj is a function of ⇢td 1 and the data of DMUj . For ⇢td 1 , it affects the feasible
region and ⇢td 1  1. When t and j remain constant, the larger ⇢td 1 is, the larger the
feasible region becomes. A larger feasible region results in larger slack values obtained
from the solution. Larger slack values lead to a smaller ⇢td . Hence, we can conclude
that the larger ⇢td 1 is, the smaller ⇢td becomes, and vice versa; the smaller ⇢td 1 is,
the larger ⇢td becomes. Since ⇢tj  1 , when ⇢tj 1 = 1, ⇢tj is at its minimum value.
When ⇢tj 1
= 1, the solution of Equation (7) is a feasible solution for Equation (8),
which is the cross-efficiency value ⇢1j . Therefore, for all t > 1, ⇢tj ⇢1j holds true.
(2) First, let us observe the relationship between ⇢1j , ⇢2j , ⇢3j , ⇢4j . Based on (1), we know
1 N
that ⇢1j is the minimum value, and it follows that ⇢2j = 1
N Âd=1 f ⇢d , j is the maximum
1 N 1 N
value. Since ⇢2j  1, it can be deduced that ⇢3j = N Âd=1 f ⇢2d , j ⇢1j = N Â1 f(1, j).
⇣ ⌘
3 2 4 1 N 3 1 N
Further, as ⇢j  ⇢j , we can infer that ⇢j = N Âd=1 f ⇢d , j ⇢j = N Â1 f ⇢2j , j .
3

Therefore, for all j, we have ⇢2j ⇢4j ⇢3j ⇢1j .

Next, let us prove the case for t 2:
⇢2a
j ⇢2a
j
+2
⇢2a
j
+1
⇢2a
j
1
, j = 1, 2, . . . , n; a = 1, 2, . . .
To prove this, we will use mathematical induction. If ⇢2a j ⌘ ⇢2a
j
1
is true, then
⇣
it follows that ⇢2aj
+1
= N1 ÂN 2a 2a 1 N
d=1 f ⇢d , j  ⇢j = N Â1 f ⇢j
2a 1
, j , and further ⇢2a
j
+2
=
⇣ ⌘ ⇣ ⌘
2a+1
1 N
N Âd=1 f ⇢d ,j ⇢2a
j
+1
= N1 ÂN 2a 2
1 f ⇢j , j . Since ⇢j ⇢1j , it is always true for j =
1, 2, . . . , n; a = 1, 2, . . . that ⇢2a
j ⇢2a
j
+2
⇢2a
j
+1
⇢2a
j
1
. Therefore, we have ⇢2j ⇢4j
··· ⇢2t
j
2
⇢2t
j ⇢2t
j
1
· · · ⇢3j ⇢1j . ⇤

Combining (1) and (2), it can be concluded that the aforementioned algorithm is convergent.

4. Numerical Example and Case Study

4.1. Model Comparison
This paper employs two case studies to analyze the differences and advantages be-
tween the SBM game cross model and the traditional SBM model. The specific data used
are presented in Table 1.
The difference between the two case study’s data lies in the input of DMU G, where in
Case 2, the input of G is 10 higher than that in Case 1. This was performed to showcase a
fact: in the traditional DEA model with variable returns to scale, an increase in the input
of G does not affect its efficiency score. This is a perplexing result, implying that G will
consistently operate at the frontier even with a larger input. The specific situation is shown
in Figure 1.
Systems 2024, 12, 78 12 of 26

Table 1. Data for case.

Case 1 Data Case 2 Data

DMU Input Output DMU Input Output
A 8 8 A 8 8
B 14 6 B 14 6
C 24 25 C 24 25
D 20 6 D 20 6
E 30 18 E 30 18
F 20 15 F 20 15
G 40 35 G 50 * 35
Note: The ‘*’ symbol in the table denotes differences between the data in Case 1 and Case 2.

Figure 1. Graphical representation of data. for Case 1 (A) and Case 2 (B). (Note: In both subfigures A
(Case 1) and B (Case 2), the red dots represent the positions of the DMUs, with letters indicating the
names of the DMUs. The solid black lines indicate the efficiency frontier. The red dashed lines are
specifically drawn to highlight the difference in the position of DMU G between the two cases).

In Figure 1A,B, two case data are presented, and the frontier is connected by a black
line. It can be seen from Figure 1 that, even when the input of G increases, it remains on the
frontier. This holds true even if the input of G continues to increase. We further calculated
the results of both the traditional SBM model and the game cross-efficiency SBM model for
the two sets of data and compiled them in Table 2.

Table 2. Comparison of SBM model results.

Traditional SBM Non-Oriented Model Game Cross-Efficiency SBM Non-Oriented Model

DMU
Case1 Rank1 Case2 Rank2 Case1 Rank1 Case2 Rank2
A 1.0000 1 1.0000 1 0.9943 2 0.9943 2
B 0.4174 6 0.4174 6 0.6978 6 0.6823 6
C 1.0000 1 1.0000 1 1.0000 1 1.0000 1
D 0.2892 7 0.2892 7 0.5742 7 0.5633 7
E 0.5760 5 0.5760 5 0.8420 5 0.8315 5
F 0.7229 4 0.7229 4 0.9096 4 0.9010 3
G 1.0000 1 1.0000 1 0.9600 3 0.8790 4
Systems 2024, 12, 78 13 of 26

Table 2 displays the outcomes and the ranking of the two datasets based on the tradi-
tional SBM model in columns 2 through 5. Additionally, columns 6 through 9 demonstrate
the outcomes and ranking of the same datasets under the game cross-efficiency SBM model.
As depicted in Table 2, the results for both datasets in the traditional SBM model are
the same. This implies that the productivity of edge decision units such as G cannot be
accurately identified in the traditional SBM model. Consequently, the SBM non-oriented
model provides an incorrect evaluation of efficiency for such DMUs. This issue arises
because each DMU in the SBM model selects the optimal frontier for itself to compare
efficiency. This type of DMU should be an outlier, and its own performance should be the
comparison target due to its high yield. Moreover, the traditional SBM model presents
several DMUs with a 1 efficiency score, where A, C, and G all have an efficiency score of 1,
and cannot be ranked fully. These are the problems of the traditional SBM model.
The SBM game cross-efficiency model is employed to address the aforementioned
issues. Notably, Table 2 presents disparate outcomes for the two sets of data when utilizing
the game cross-efficiency model. When using Case 1 data, the efficiency of G is measured
to rank 3rd, and when using Case 2 data, the efficiency of G is measured to decline further
to rank 4th, even below the efficiency of F. A simple comparison of the inputs and outputs
of F and G reveals that, in Case 1, G has a lower cost per unit output, thereby implying
its greater efficiency compared to F. On the other hand, in Case 2, the cost per unit of G’s
output surpasses that of F, rendering it a less efficient unit compared to F. By contrast, the
traditional SBM model fall short of providing a reasonable and accurate solution. It is
worth noting that the decision units’ production efficiency in Case 2 is also affected since
the efficiency of each DMU is measured by considering multiple production fronts. Thus,
the efficiency of G is weighted based on the results of numerous cases, including A, C,
and G as frontiers, which enhances the fairness of the efficiency measurement. As such,
changes in the inputs and outputs for a frontier unit occasion a ripple effect that affects the
efficiency values of most units, without much influence on the ranking.
In Table 3, we present the results of the data from Case 1 using different directional
models. Here, Sx represents the amount of input slack, i.e., the reducible input, and Sy
represents the amount of output slack, i.e., the achievable output increase.

Table 3. Comparison of model results for different orientations.

SBM Non-Oriented Model SBM Input-Oriented Model

DMU
Efficiency Rank Sx Sy Efficiency Rank Sx Sy
A 0.9943 2 0.0457 0 0.9943 2 0.0457 0
B 0.6978 6 0 3.7057 0.5856 6 5.8014 0
C 1.0000 1 0 0.0000 1.0000 1 0.0000 0
D 0.5742 7 0 7.1306 0.4137 7 11.7262 0
E 0.8420 5 0 4.6112 0.7591 5 7.2261 0
F 0.9096 4 0 1.7884 0.8775 4 2.4503 0
G 0.9600 3 0 1.6340 0.9539 3 1.8424 0

The comparison of the results obtained from the two models indicates a difference in
the degree of slack. Specifically, the non-oriented model comprises an analysis that accounts
for enhancements in both inputs and outputs, while the input-oriented model emphasizes
improvements from the perspective of inputs. Thus, the non-oriented model may be
regarded as a more economical approach that accommodates input reduction and output
augmentation. Conversely, the input-oriented model largely emphasizes the reduction
of inputs. Similarly, the corresponding output-oriented model primarily emphasizes the
elevation of outputs.

4.2. Summary
The results of the game cross-efficiency model are better than the results of the tra-
ditional model. On the one hand, this model ensures that all decision units achieve their
Systems 2024, 12, 78 14 of 26

highest efficiency without affecting the efficiency of other decision units, consequently
eliminating the possibility of solution ambiguities that arise from cross-efficiency models.
The competing decision-making units adopt a continuous adjustment cycle in which each
unit utilizes information from other decision-making units to establish optimum collective
efficiency. On the other hand, this model conducts a more comprehensive ranking of all
decision units, which eliminates the possibility of an excessive number of decision units
with efficiency ratings of 1 that cannot be compared. Furthermore, the efficiency of all
decision-making units is calculated as a weighted value of the efficiency values targeted
towards different frontier decision-making units, preventing the occurrence of “overstated”
or “understated” efficiency due to differing target points. For example, in the present case,
the production efficiency of G is high, while the efficiency of E and F is low.
In comparing the game cross-efficiency models with three different orientations, the
non-directed model focuses on both input and output slack. The input-oriented model
aims to save input resources, focusing solely on input slack, while the output-oriented
model emphasizes output growth and considers output slack.

5. Empirical Analysis and Discussion

This paper employs the game cross-efficiency SBM input-oriented model to assess the
production and energy efficiency of China’s provincial industries from an input perspective.

5.1. Data
According to the data availability, this study uses regional data from 30 provinces and
municipalities in China, excluding Hong Kong, Macao, Taiwan, and Tibet, from the years
2010–2019 as the research sample. The study focuses on the industrial economic activities
of each province and municipality, measuring and comparing the overall distribution of
China’s energy efficiency over the course of the decade. The number of research subjects
satisfies the empirical rule that the number of decision-making units is three times the
sum of the input-output indicators. The primary sources of data used in the study are
the “China Industrial Statistics Yearbook”, “China Urban Statistics Yearbook”, various
provincial and municipal statistical yearbooks, and China’s Carbon Emissions Accounts
and Datasets (CEADs). In this paper, drawing on the selection of input-output variables
by Li and colleagues [29], we consider industrial gross output as the desirable output
and CO2 emissions as the undesirable output. The inputs include capital stock, labor,
and energy consumption. This approach aligns with a growing focus on environmental
sustainability in economic modeling, where the inclusion of undesirable outputs, like CO2
emissions, is critical for a comprehensive assessment of industrial efficiency. By incorpo-
rating these factors, the model not only evaluates the productive efficiency of industries
but also their environmental impact, thereby providing a more holistic understanding of
their performance.
• Total industrial output value of industries above a designated size (TIOV). The indus-
trial output data mainly come from the “China Industrial Statistical Yearbook” and
the “China Urban Statistical Yearbook”. The data in the “China Industrial Statistical
Yearbook” are only available up to 2011, so we supplement them with the aggregated
data from various prefecture-level cities in the “China Urban Statistical Yearbook” and
data from the statistical yearbooks of each province. The total output value data are
deflated using the industrial product factory price index in the “China Price Statistical
Yearbook” (with 2010 as the base year) to obtain constant-price data. The data are in
units of 100 million yuan (CNY).
• CO2 . Data on carbon dioxide (CO2 ) emissions have been obtained from CEADs’ provin-
cial emissions inventory, which includes emissions by industry across 30 provinces
and municipalities ranging from 2005 to 2019. These data have been calculated by
scholars [30–33]. Therefore, they possess a high level of accuracy. The data for each
province are determined by the summation of individual subsectors in million tons.
Systems 2024, 12, 78 15 of 26

• Capital Stock (K). Capital stock data come from the net fixed capital value in the
“China Industrial Statistical Yearbook”, which has already taken depreciation and
current additions into account, so no further adjustment is needed. Capital stock data
are deflated using the industrial product purchase price index from the “China Price
Statistical Yearbook” (with 2010 as the base year) to obtain constant price data. The
data are in units of 100 million yuan (CNY).
• Labor force (L). The labor force data are sourced from the average number of workers
employed in the China Industrial Statistical Yearbook, with data missing for 2012.
Missing data were added by interpolation. The unit of measurement is in ten thou-
sand units.
• Energy (E). Energy consumption data have been obtained from CEADs’ provincial
energy inventory scaling across 30 provinces and cities from 2010 to 2019. The data
are categorized by industry and type of energy consumption (coal, gasoline, kerosene,
diesel, natural gas, etc.). The standard coal consumption for each province is deter-
mined by converting the reference coefficients of various energy sources into standard
coal by the National Bureau of Statistics. The total consumption is given in million tons.
Table 4 presents the findings of the descriptive statistical analysis conducted on the
input and output indicators of 30 provinces in China over the years 2010 to 2019. The
variations in the scale of regional economic development among these regions indicate
a significant disparity in resource allocation. We find that there are significant differ-
ences among each indicator, with respective sizes exceeding tenfold, and a relatively high
standard deviation.

Table 4. Descriptive statistics.

Vars n Mean SD Median Min Max Skew Kurtosis

TIOV 300 34461.0472 35,150.7632 23,527.1382 1381.2500 169,739.0351 1.9390 3.3650
CO2 300 27,846.2948 19,434.1233 21,566.4970 1891.5399 84,407.9331 1.0736 0.4206
K 300 10,549.0162 7914.5074 8517.8735 557.9705 43,839.6454 1.7075 3.2460
L 300 306.7343 327.3460 187.5600 10.0000 1568.0000 1.9664 3.5347
E 300 7461.0219 5254.2637 5787.4079 539.1105 27,451.7985 1.3925 1.7390

5.2. Convergence Process

This study first analyzes an input-oriented SBM game cross-efficiency model incorpo-
rating undesirable outputs, employing regional data from 30 Chinese provinces for the year
2010. Figure 2 shows the game cross-efficiency convergence for 11 eastern provinces. Im-
portantly, it depicts the temporal convergence of each decision unit’s game cross-efficiency.
During this process, each province, acting as a player, seeks to optimize its production effi-
ciency, presuming the efficiencies of other DMUs stay constant. Ultimately, after numerous
iterations, all provinces achieve a stable equilibrium value, marking their Nash equilibrium,
indicative of optimal strategic outcomes.

5.3. Analysis of Production Efficiency and Total Factor Energy Efficiency among Provinces in China
5.3.1. The Analysis of Production Efficiency
Table 5 demonstrates the production efficiency of 30 provinces in China, categorized
as eastern, central, and western provinces and cities. The results reveal that eight provinces
and cities, namely Shanghai, Shandong, Jiangsu, Beijing, Hubei, Anhui, Jilin, and Tianjin,
have exhibited higher production efficiency throughout the period from 2010 to 2019,
exceeding the benchmark of 0.80. In contrast, Ningxia and Yunnan have demonstrated
lower production efficiency levels below 0.60. Notably, the majority of provinces presented
their highest production efficiency in 2011, with a slight decline observed in 2018 and
2019. These findings suggest that China has witnessed some degree of redundancy in
its industrial development, which has underpinned the supply-side reform of zombie
enterprises. However, there is still room for enhancing productivity efficiency.
Systems 2024, 12, 78 16 of 26

Figure 2. Achieving the best game cross-efficiency of the overall process for 11 regions in the
eastern area.

The findings suggest that the eastern region displays the highest level of efficiency
among provinces in China, followed by the central region, and the western region performs
with the least efficiency. The current study supplements earlier research, which similarly
established such a trend.
The eastern region, widely recognized as the most developed in China, encompasses
cities such as Beijing, Tianjin, and Hebei, and hosts industrial activity that fluctuates in
productivity but remains substantially elevated. The Yangtze River Delta region, consisting
of Shanghai, Zhejiang, and Jiangsu, and the Pearl River Delta region, located in Guangdong
province, reveal relatively higher production efficiency, with both regions recording pro-
ductivity levels above 0.75. These outcomes indicate the leading position of these regions
in industrial development.
Coastal regions, such as Fujian, have experienced slow growth. Fujian province
primarily focuses on light industry and has experienced relatively minor impacts from
overcapacity reduction and environmental regulations, allowing for gradual growth. In the
eastern region, Hainan has the lowest industrial production efficiency, ranking only 20th
among all provinces. This is due to the weak industrial base in Hainan.
Three northeastern provinces (Liaoning, Jilin, and Heilongjiang) are rich in natural
resources and have been important heavy industry bases in China in the past. Consequently,
the region has experienced expedited development rates accompanied by heightened
pollution levels. However, increased public attention to environmental degradation has
led to the implementation of industrial restructuring processes to reduce environmental
Systems 2024, 12, 78 17 of 26

impact, resulting in a trend of fluctuating production efficiency. Among them, the change
in production efficiency in Jilin Province is very steady, indicating a smooth transition in
industrial restructuring without a significant impact on production efficiency. Meanwhile,
Liaoning and Heilongjiang could benefit from emulating Jilin’s measured approach to
avoid adverse effects on industrial production output.

Table 5. Production efficiency by province.

Area 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Average Rank
Eastern 0.8252 0.8269 0.8126 0.8082 0.8023 0.7803 0.7761 0.7682 0.7439 0.7421 0.7886
Beijing 0.8632 0.8013 0.7436 0.9242 0.8992 0.7236 0.8283 0.8695 0.8172 0.7609 0.8231 5
Fujian 0.7247 0.7365 0.7465 0.7709 0.7431 0.7622 0.7524 0.7515 0.7422 0.7598 0.7490 15
Guangdong 0.7997 0.7884 0.7851 0.7608 0.7528 0.7619 0.7910 0.7336 0.7069 0.6967 0.7577 14
Hainan 0.8384 0.8613 0.8109 0.6527 0.7391 0.6495 0.6373 0.7082 0.6441 0.6570 0.7198 20
Hebei 0.7295 0.7725 0.7956 0.7161 0.7192 0.7305 0.7203 0.6979 0.6834 0.6961 0.7261 19
Jiangsu 0.8353 0.8523 0.8640 0.8411 0.8273 0.8604 0.8571 0.8077 0.7849 0.8234 0.8353 3
Liaoning 0.7851 0.8358 0.8162 0.7797 0.7659 0.7000 0.5717 0.6020 0.6269 0.6349 0.7118 21
Shandong 0.8161 0.8390 0.8483 0.8611 0.8352 0.8880 0.8436 0.8180 0.8106 0.7900 0.8350 4
Shanghai 0.9300 0.9249 0.8989 0.8646 0.8314 0.8693 0.8429 0.8181 0.7810 0.7920 0.8553 1
Tianjin 0.8919 0.8823 0.8861 0.7946 0.8129 0.9145 0.8639 0.7747 0.7684 0.7919 0.8381 2
Zhejiang 0.8632 0.8013 0.7436 0.9242 0.8992 0.7236 0.8283 0.8695 0.8172 0.7609 0.8231 5
Central 0.7408 0.7663 0.7753 0.7605 0.7493 0.7838 0.7620 0.7365 0.7386 0.7478 0.7561
Anhui 0.8017 0.8411 0.8543 0.8255 0.8147 0.8413 0.7944 0.7910 0.7947 0.7998 0.8158 6
Henan 0.7394 0.7795 0.8007 0.8133 0.8039 0.8416 0.8272 0.7850 0.7867 0.7975 0.7975 9
Heilongjiang 0.7052 0.6985 0.7083 0.6672 0.6314 0.6423 0.6462 0.6079 0.5498 0.5539 0.6411 25
Hubei 0.7735 0.8186 0.7974 0.8308 0.7972 0.8447 0.8024 0.7912 0.7984 0.8045 0.8059 7
Hunan 0.7462 0.7634 0.7693 0.7788 0.7597 0.7887 0.7437 0.7324 0.7669 0.7909 0.7640 13
Jilin 0.7955 0.8547 0.8540 0.7669 0.7766 0.8344 0.8032 0.7717 0.7962 0.7950 0.8048 8
Jiangxi 0.7607 0.7822 0.7847 0.7628 0.7408 0.7959 0.7850 0.7701 0.7871 0.8216 0.7791 11
Shanxi 0.6042 0.5924 0.6340 0.6387 0.6704 0.6816 0.6935 0.6430 0.6291 0.6195 0.6406 26
Western 0.6725 0.6951 0.6882 0.6450 0.6818 0.6560 0.6685 0.6624 0.6247 0.6247 0.6619
Gansu 0.6417 0.7619 0.7546 0.6382 0.7073 0.6200 0.6311 0.5663 0.5717 0.5201 0.6413 24
Guangxi 0.7098 0.7320 0.7642 0.7555 0.7240 0.7390 0.7101 0.7037 0.7400 0.7844 0.7363 18
Guizhou 0.5340 0.6211 0.5835 0.6320 0.6378 0.7153 0.7306 0.7099 0.6610 0.6738 0.6499 22
Inner Mongolia 0.7712 0.7930 0.7338 0.6056 0.7009 0.6425 0.6440 0.5798 0.5024 0.4958 0.6469 23
Ningxia 0.5741 0.5316 0.5747 0.5763 0.6267 0.5469 0.5772 0.6153 0.5385 0.5242 0.5685 29
Qinghai 0.5819 0.6563 0.6158 0.5344 0.5939 0.5099 0.5510 0.5459 0.4479 0.4513 0.5488 30
Shaanxi 0.7910 0.7382 0.7759 0.7450 0.6901 0.7293 0.7341 0.7398 0.7205 0.7137 0.7378 17
Sichuan 0.7546 0.7356 0.7243 0.6679 0.7940 0.7341 0.7513 0.7411 0.7334 0.7522 0.7388 16
Xinjiang 0.6851 0.6940 0.6325 0.5308 0.5982 0.5724 0.5766 0.6347 0.5456 0.5321 0.6002 28
Yunnan 0.6440 0.6547 0.6800 0.6065 0.6384 0.5878 0.6175 0.6584 0.6356 0.6274 0.6350 27
Chongqing 0.7100 0.7280 0.7305 0.8032 0.7890 0.8186 0.8295 0.7914 0.7752 0.7970 0.7772 12

The industrial development in the central provinces of Jiangxi and Anhui has always
been at a relatively high and stable level. Jiangxi prioritizes non-ferrous metal smelting,
machinery manufacturing, and agricultural and food processing, and maintains closer trade
relationships with coastal regions. Meanwhile, Anhui’s manufacturing prowess extends to
emerging high-technology sectors, such as display industries, equipment manufacturing,
and industrial robotics. These provinces play significant roles in manufacturing, and their
consistent production efficiency attests to their leading positions across various fields.
The overall production efficiency in the western region is relatively low. Although
there are provinces with moderate production efficiency, such as Chongqing, Sichuan, and
Guangxi, there is a significant gap compared to the eastern and central regions. There
are multiple factors contributing to this situation. First, the industrial base in the western
region is weak. Second, the western region is less economically developed compared to
the eastern region, with lower per capita income and weaker consumption capacity for
industrial products, leading to lower industrial scale efficiency. Third, the geographical
Systems 2024, 12, 78 18 of 26

environment in the western region results in higher transportation costs. Finally, the
western region has a lower population density of highly skilled industrial laborers, which
does not meet the labor demand of factories.
Through these results, we can identify the factors contributing to the growth in
production efficiency across various provinces as follows:
1. Developed Infrastructure and Industrial Clusters: Cities in the eastern region, such as
Beijing, Tianjin, and Shanghai, not only possess developed infrastructure but have
also formed efficient industrial clusters. These clusters facilitate the effective flow of
information, technology, and resources, further enhancing production efficiency.
2. Policy Support: Some regions have benefited from national policy support and mea-
sures to improve the environment, contributing to efficiency gains.
3. Differences in Economic Development Levels: Coastal provinces in the eastern region,
especially Jiangsu, Shanghai, and Zhejiang, exhibit the highest production efficiency.
Due to their open economic policies, advanced industrial bases, and convenient
transportation and logistics conditions, these areas attract substantial domestic and
foreign investment. This, in turn, promotes the development of high-tech industries
and the improvement of production efficiency.
The risks to the development of production efficiency include:
1. Weak Industrial Base: Western regions, such as Gansu, Guizhou, and Ningxia, have a
weaker industrial base, leading to generally lower production efficiency. The lower
level of industrialization and technological base restricts the improvement of produc-
tion efficiency.
2. Geographical and Transportation Limitations: The complex terrain and inconvenient
transportation in the western regions result in higher logistics costs, which also limit
production efficiency.
3. Shortage of Talent: The issues of low population density and a shortage of high-
skilled industrial labor are particularly pronounced in the western regions, affecting
the production efficiency and technological innovation capabilities of factories.
We further analyzed the efficiency change trends of various regions during this period.
Figure 3A displays the average efficiency changes of the three regions, highlighting the
temporal trends. The figure illustrates a gradual decline in average efficiency in the
eastern region, contrasted with a slow increase in the efficiency of the central region. This
trend mirrors shifts in China’s industrial distribution over the years, indicating a gradual
reallocation of industrial development focus from the eastern to the central regions.
Figure 3B depicts the changes within the Beijing-Tianjin-Hebei triangle area over this
period. From 2010 to 2019, Beijing and Tianjin’s production efficiency showed significant
fluctuations, in contrast to Hebei’s relatively stable efficiency. Notably, Beijing’s efficiency
dipped in 2012, 2015, and 2019. A significant factor in Beijing’s efficiency decline is the
underutilization of its expanding capital stock. By examining the raw data, we found that
Beijing’s capital stock experienced substantial growth in these three years, increasing by
817.56 billion, 802.99 billion, and 265.05 billion yuan (in constant prices), with the first two
increases being nearly 15%. Meanwhile, Beijing’s gross industrial output did not experience
significant growth. This indicates that delays in production startup or year-end completions
of new factories likely contributed to Beijing’s reduced efficiency. Tianjin’s case differs from
Beijing’s. The reason for Tianjin’s lower production efficiency in 2013 is due to the growth
of its capital stock by 948.98 billion yuan (in constant prices). Tianjin’s efficiency decline
in 2017 can be attributed to supply-side reform policies, leading to a significant capital
stock decrease. In 2017, Tianjin’s capital stock and total output value saw reductions of
1845.49 billion yuan and 8771.15 billion yuan, respectively, the latter constituting roughly a
quarter of 2016’s total output.
Figure 3C reveals minimal fluctuations in productivity trends within the Yangtze River
Delta region (Shanghai, Zhejiang, Jiangsu), indicating consistency. This consistency sug-
gests that productivity in the region grew steadily, in a balanced and mutually reinforcing
Systems 2024, 12, 78 19 of 26

manner. Likewise, Guangdong’s productivity trend mirrored that of the Yangtze River
Delta, indicating synchronized development patterns among major coastal cities.

Figure 3. Trends in the overall efficiencies in different regions and provinces from 2010 to 2019.

Figure 3D illustrates a gradual decline in production efficiency in Heilongjiang, con-

trasted with an increase in Jilin, among the three northeastern provinces. This trend reflects
a significant shift in industrial emphasis within the northeast region. Beginning in 2016,
Liaoning Province saw a notable decrease in output value, resulting in a marked reduction
in production efficiency. One reason for this downturn is the previously overstated data
in Liaoning Province. In 2016, Liaoning disclosed its actual GDP as 2203.7 billion yuan,
reflecting a 670.5 billion yuan reduction from 2015—an exaggeration rate of 23.3%. Follow-
ing this disclosure, Liaoning’s national GDP ranking fell from 10th to 14th. Subsequently,
its growth rate remained among the lowest in the country for several years. Additionally,
beginning in 2011, Liaoning has been focusing on developing its service industry, signifying
a strategic adjustment in its development priorities.

5.3.2. The Analysis on Total Factor Energy Efficiency

From the total factor energy efficiency proposed by hu et al. [34], the total factor energy
efficiency can be calculated as follows.

Target Energy Input

TFEE = (14)
Actual Energy Input
Systems 2024, 12, 78 20 of 26

In the SBM game cross-efficiency model, the total factor energy efficiency is calculated
as follows. ⇣ ⌘
1 N (k)e
N Â s
i id
TFEEd = 1 , k = 1, 2, . . . , N (15)
xed
The total factor energy efficiency of 30 provinces and cities in China is shown in Table 6.
Overall, energy efficiency is still the highest in eastern cities, followed by central cities, and
the lowest in western cities. From 2010 to 2019, Beijing, Guangdong, Zhejiang, Jiangsu, and
Shanghai had relatively high average total factor energy efficiencies, all exceeding 0.80. In
contrast, Ningxia, Qinghai, Xinjiang, Gansu, and Shanxi had lower energy efficiencies, all
below 0.35, indicating significant room for improvement. Most provinces and cities show
an upward trend in energy efficiency, although the changes are relatively stable.

Table 6. Total factor energy efficiency results by province.

Area 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Average Rank
Eastern 0.7538 0.7750 0.7876 0.6542 0.6428 0.7637 0.6744 0.6184 0.6197 0.6619 0.6952
Beijing 0.9735 0.9881 0.9889 0.9933 0.9944 0.9931 0.9958 0.9957 0.9958 0.9926 0.9911 1
Fujian 0.6469 0.6646 0.7037 0.7511 0.6462 0.7502 0.6682 0.7036 0.7626 0.8259 0.7123 7
Guangdong 0.9763 0.9028 0.9235 0.8548 0.8152 0.9585 0.8878 0.8151 0.8358 0.8824 0.8852 2
Hainan 0.7219 0.7133 0.5902 0.2375 0.4735 0.4015 0.3703 0.4740 0.2689 0.3049 0.4556 18
Hebei 0.3041 0.4137 0.4931 0.2354 0.2387 0.3856 0.3075 0.2538 0.2318 0.2951 0.3159 28
Jiangsu 0.8314 0.8542 0.9250 0.8169 0.7675 0.9324 0.8641 0.7361 0.7604 0.8002 0.8288 4
Liaoning 0.4735 0.6195 0.5843 0.4695 0.4346 0.4455 0.2547 0.1856 0.2294 0.3269 0.4024 21
Shandong 0.6669 0.6835 0.7296 0.7494 0.6731 0.8651 0.7500 0.6869 0.6790 0.5985 0.7082 8
Shanghai 0.9517 0.9340 0.9493 0.7757 0.7093 0.8852 0.7631 0.6966 0.7447 0.8018 0.8211 5
Tianjin 0.8256 0.8386 0.8435 0.4812 0.5316 0.8458 0.6866 0.4826 0.5106 0.5978 0.6644 10
Zhejiang 0.9201 0.9123 0.9329 0.8311 0.7872 0.9374 0.8707 0.7727 0.7982 0.8552 0.8618 3
Central 0.5065 0.5774 0.6090 0.5317 0.5221 0.6928 0.5855 0.5204 0.6105 0.6514 0.5807
Anhui 0.6270 0.6887 0.7576 0.6726 0.6607 0.8107 0.6665 0.6459 0.7244 0.7308 0.6985 9
Henan 0.4611 0.5847 0.6800 0.7262 0.7037 0.9119 0.8063 0.7282 0.7593 0.8168 0.7178 6
Heilongjiang 0.5249 0.5365 0.5495 0.3284 0.3098 0.5323 0.3580 0.2625 0.3421 0.3453 0.4089 20
Hubei 0.5106 0.6145 0.5365 0.6630 0.6163 0.7623 0.6613 0.6042 0.7141 0.7885 0.6471 12
Hunan 0.4834 0.5272 0.5832 0.6399 0.5864 0.7085 0.5774 0.5676 0.7272 0.7971 0.6198 13
Jilin 0.5109 0.6662 0.6800 0.3981 0.4153 0.6588 0.5788 0.4801 0.5949 0.6066 0.5590 15
Jiangxi 0.6092 0.6512 0.6837 0.5865 0.5364 0.7000 0.6618 0.6401 0.7316 0.8029 0.6603 11
Shanxi 0.3246 0.3500 0.4015 0.2392 0.3478 0.4581 0.3735 0.2349 0.2900 0.3229 0.3342 26
Western 0.4181 0.4923 0.4720 0.3071 0.4154 0.4667 0.4229 0.3876 0.3473 0.3915 0.4121
Gansu 0.3892 0.6370 0.5804 0.2422 0.4274 0.4257 0.4082 0.2646 0.2628 0.2753 0.3913 23
Guangxi 0.4070 0.4170 0.4595 0.4447 0.3854 0.4768 0.4107 0.3904 0.4632 0.5384 0.4393 19
Guizhou 0.2836 0.2880 0.2923 0.2630 0.2963 0.5623 0.4811 0.4078 0.3983 0.4611 0.3734 24
Inner Mongolia 0.5829 0.7315 0.6195 0.2333 0.4947 0.3873 0.3233 0.2952 0.1429 0.1569 0.3968 22
Ningxia 0.2392 0.2590 0.3010 0.1745 0.3183 0.2682 0.2620 0.2740 0.1504 0.1647 0.2411 30
Qinghai 0.3869 0.5598 0.4317 0.1831 0.3672 0.2902 0.2860 0.2955 0.1615 0.1773 0.3139 29
Shaanxi 0.5790 0.6434 0.7193 0.4116 0.4598 0.6671 0.5566 0.5148 0.4863 0.5516 0.5589 16
Sichuan 0.5102 0.4876 0.5085 0.3605 0.5250 0.5948 0.5263 0.4708 0.5683 0.6437 0.5196 17
Xinjiang 0.4794 0.5386 0.3914 0.1614 0.3156 0.3097 0.2923 0.3635 0.1937 0.2084 0.3254 27
Yunnan 0.3316 0.4276 0.4227 0.2434 0.3966 0.4046 0.3604 0.3693 0.3064 0.3472 0.3610 25
Chongqing 0.4098 0.4260 0.4656 0.6601 0.5829 0.7468 0.7454 0.6173 0.6864 0.7823 0.6123 14

Shanghai and Shandong have experienced a declining trend in energy efficiency.

Among them, Shanghai decreased from 0.9517 to 0.8018, a drop of 0.1499, or 15.75%. The
slow decline in Shanghai is due to the gradual decrease in industrial capital stock and labor
since 2015, while energy input increased. As a result, Shanghai improved its capital and
labor utilization efficiency while experiencing a decrease in energy efficiency. Shandong’s
decline in energy efficiency is consistent with that of Shanghai.
Systems 2024, 12, 78 21 of 26

Most provinces maintain stable or improved industrial energy efficiency; meanwhile,

most provinces also maintain stable or decreased production efficiency. This reflects China’s
growing focus on environmental and energy improvements in industrial development.
In Figure 4, we present a comprehensive analysis by integrating the average produc-
tion efficiency and total factor energy efficiency for every province. Subsequently, we
categorized the decision units into four distinct groups using a dividing line of 70%. The
first group, located in the upper-left quadrant, represents DMUs with low production
efficiency but high energy efficiency. In particular, factors such as labor productivity and
capital utilization require significant improvement. However, we acknowledge that deci-
sion units in this category are less prevalent due to the high dependence of energy efficiency
on labor productivity and capital utilization.

Figure 4. Ten-year average production efficiency and energy efficiency of each province. (Note: In
this figure, red solid lines at x = 0.7 and y = 0.7 demarcate the threshold for acceptable efficiency
levels, with efficiency values of 0.7 or higher considered satisfactory.)

The second group, located in the upper-right quadrant, represents DMUs with exem-
plary performance in terms of both productivity and total factor energy efficiency. This
group serves as a model for other decision-making units to learn from. Notably, provinces
and cities such as Guangdong, Beijing, Jiangsu, Zhejiang, and Shanghai demonstrate
remarkable performance in this category.
In contrast, the third group, located in the lower-left quadrant, represents DMUs with
low performance in both production efficiency and total factor energy efficiency. With
significant room for improvement, provinces and cities such as Qinghai, Yunnan, Shanxi,
Ningxia, and Xinjiang display significant potential for efficiency enhancements.
Systems 2024, 12, 78 22 of 26

The fourth type of region is the bottom right corner region, where the DMUs have a
relatively high production efficiency but low total factor energy efficiency. These regions
are characterized by a focus on production without considering environmental protec-
tion, prioritizing economic development. Therefore, they are called high-consumption
economic areas.
There continue to be significant disparities in both production efficiency and energy
efficiency levels among the eastern, central, and western regions. In the western region,
production efficiency is below 0.80, and energy efficiency ratings fall under 0.70, with four
provinces even recording ratings lower than 0.35. In contrast, in the eastern region, only
three provinces have production efficiencies below 0.75. These provinces also have higher
energy efficiencies, none dropping below 0.60. The central region demonstrates a spectrum
of production efficiency and energy efficiency ranks, with some provinces showing elevated
energy efficiency and production efficiency levels and others reporting lower rates. Notably,
Guangdong in the Pearl River Delta region exhibits high levels of both production efficiency
and total factor energy efficiency. Similarly, Shanghai, Zhejiang, and Jiangsu in the Yangtze
River Delta area also demonstrate high levels of these efficiencies. The data results align
with our real-life impressions. In these economically developed regions, high production
efficiency is required to cover higher costs and increased industry competition. The total
factor energy efficiency is related to government policies. Guangdong and Beijing have
stricter energy and carbon emission regulations, leading to higher total factor energy
efficiency in these areas.

5.4. Robustness Analysis

To test the robustness of the results, this paper controls the data and performs compar-
ative analysis. Using the same data, we apply the traditional SBM input-oriented model
and two cross-efficiency input-oriented models to analyze production efficiency.
Table 7 displays the production efficiency values obtained in 2010 using different
input-oriented models. The first model is the SBM game cross-efficiency model proposed
in this study; the second model is the SBM model proposed by Tone [28]; the third model is
the one proposed by Doyle and Green [1]; and the fourth model is proposed by Lim and
Zhu [13].
From Table 7, it can be seen that the results of the model proposed in this study are
similar to those of the other two cross-efficiency models, which confirms the robustness of
the results. In addition, the traditional SBM model tends to assign efficiency values of 1
to most decision-making units, making comparison impossible. Moreover, the traditional
SBM model has some efficiency value misestimations, such as Hainan Province’s efficiency
value of 1, despite the province’s weak industrial base. Cross-efficiency models greatly
outperform the traditional SBM model in this regard. The model proposed in this study
goes even further, taking into account both slack variables and competitiveness among
decision-making units.
From Figure 5, it is evident that the kernel density plots for all models are predomi-
nantly concentrated between 0.5 and 0.9. The model introduced in this study exhibits a
more concentrated distribution within this range compared to the others. A distinctive
characteristic of the proposed model is its elevated minimum limit and the infrequent
occurrence of DMUs attaining the maximum efficiency score of 1. This elevated minimum
efficiency reflects the model’s capability to optimize its efficiency, considering the efficiency
levels of other DMUs. The rarity of DMUs reaching an efficiency score of 1 suggests that the
model’s efficiency calculations provide superior comparability, enabling a more accurate
ranking of DMUs by production efficiency.
Systems 2024, 12, 78 23 of 26

Table 7. Comparison of the results of the 2010 data in different models.

(1) (2) (3) (4)

Province
Our Model Rank Tone Rank Doyle and Green Rank Lim and Zhu Rank
Beijing 0.8632 3 1.0000 1 0.8792 5 0.8394 5
Fujian 0.7247 20 1.0000 1 0.6968 17 0.6721 16
Guangdong 0.7997 9 1.0000 1 0.7163 16 0.7034 12
Hainan 0.8384 4 1.0000 1 0.7803 10 0.2126 29
Hebei 0.7295 19 0.6577 16 0.8024 8 0.7695 7
Jiangsu 0.8353 5 1.0000 1 0.8860 4 0.8705 4
Liaoning 0.7851 12 0.7449 11 0.8342 6 0.8088 6
Shandong 0.8161 6 1.0000 1 0.9285 3 0.9103 2
Shanghai 0.9300 1 1.0000 1 0.9620 1 0.9420 1
Tianjin 0.8919 2 1.0000 1 0.9426 2 0.9026 3
Zhejiang 0.8064 7 0.9224 10 0.7413 12 0.7256 11
Anhui 0.8017 8 0.6981 13 0.7271 14 0.6953 14
Henan 0.7394 18 0.6949 14 0.7657 11 0.7381 10
Heilongjiang 0.7052 23 0.5376 23 0.5567 23 0.5113 22
Hubei 0.7735 13 0.6024 20 0.6706 18 0.6435 17
Hunan 0.7462 17 0.6725 15 0.7329 13 0.6983 13
Jilin 0.7955 10 0.7253 12 0.8121 7 0.7609 8
Jiangxi 0.7607 15 1.0000 1 0.7981 9 0.7576 9
Shanxi 0.6042 27 0.4444 29 0.5050 27 0.4709 24
Gansu 0.6419 26 0.4941 27 0.5163 26 0.4237 26
Guangxi 0.7098 22 0.5718 22 0.6222 22 0.5731 21
Guizhou 0.5340 30 0.4294 30 0.4406 29 0.3580 27
Inner Mongolia 0.7712 14 0.6433 17 0.7210 15 0.6809 15
Ningxia 0.5741 29 0.5099 26 0.4909 28 0.2671 28
Qinghai 0.5819 28 0.5349 24 0.4291 30 0.0677 30
Shaanxi 0.7910 11 0.6268 18 0.6613 19 0.6155 19
Sichuan 0.7546 16 0.5940 21 0.6526 21 0.6262 18
Xinjiang 0.6851 24 0.5114 25 0.5399 25 0.4392 25
Yunnan 0.6440 25 0.4889 28 0.5442 24 0.4727 23
Chongqing 0.7100 21 0.6200 19 0.6591 20 0.6085 20

As evidenced by Table 8, there exists a notably high correlation between the model
introduced in this study and the outcomes derived from alternative models. This suggests
that the efficiency estimates of the DMUs generated by the proposed model exhibit minimal
deviation. Integrating this with prior analyses allows for the conclusion that the model
yields more precise rankings of DMU production efficiency. Hence, the calculated outcomes
of the proposed model are robust and surpass those derived from other models.

Table 8. The results of the correlation tests for all models.

Mean SD Our Model Tone Doyle and Green Lim and Zhu
Our model 0.7448 0.0945 1.0000
Tone 0.7242 0.2076 0.8001 *** 1.0000
Doyle and Green 0.7005 0.1498 0.9137 *** 0.8318 *** 1.0000
Lim and Zhu 0.6225 0.2133 0.7554 *** 0.6096 *** 0.8512 *** 1.0000
Note: *** indicates significance at the 0.001 level.
Systems 2024, 12, 78 24 of 26

Figure 5. The kernel density plots for all models.

6. Conclusions
This paper introduces an SBM game cross-efficiency model incorporating undesirable
outputs. This model enhances the SBM cross-efficiency framework and integrates aspects of
game cross-efficiency. It includes non-oriented models, input-oriented models, and output-
oriented models. Different oriented models are used for different evaluation purposes. The
non-oriented model balances input and output, making it suitable for the goal orientation
of simultaneous economic development, energy conservation, and emission reduction. The
input-oriented model focuses on saving input, while the output-oriented model emphasizes
expanding desirable output and reducing emissions.
These models offer distinct advantages over traditional models. First, the model
ensures all decision units achieve maximum efficiency with others’ efficiencies held con-
stant, circumventing the issue of solution uniqueness in cross-efficiency models. Second, it
enables a more precise ranking of decision units, preventing scenarios where numerous
DMUs with an efficiency score of 1 remain incomparable. Finally, it weights the efficiencies
of all decision units based on efficiency values, using various frontier decision units as
benchmarks. Consequently, these models offer more stringent frontier surface analyses and
unbiased efficiency assessments compared to Kao and Liu’s SBM cross-efficiency model [2].
In the empirical analysis, this study uses the data of industrial enterprises above
a designated size in 30 provinces and cities in China from 2010 to 2019. We find that
eastern provinces generally have higher production efficiency and energy efficiency, such
as Guangdong, Beijing, Jiangsu, Zhejiang, and Shanghai, which are the benchmarks for
other provinces and cities to learn from. Central provinces show a polarization: either they
have relatively high production and energy efficiency, such as Henan, Jiangxi, and Hunan;
or they have relatively low production and energy efficiency, like Shanxi and Heilongjiang.
Most western provinces have relatively low production and energy efficiency, and overall
improvements are needed, such as in Qinghai, Yunnan, Ningxia, and Xinjiang. The average
Systems 2024, 12, 78 25 of 26

production efficiency is the highest in the east, the second in the middle, and the lowest in
the west. The average production efficiency in the eastern region is gradually declining,
falling by about 10% in 10 years, while the production efficiencies in the central and western
regions remain stable.
The model in this paper still has a certain limit. On the one hand, the model proposed
in this paper does not consider the intertemporal comparison and is still based on the
static game, and there is still room for improvement. On the other hand, this paper does
not involve the price factor. The model emphasizes technical efficiency rather than cost
efficiency. However, if cost efficiency is prioritized, a more accurate assessment of efficiency
can be achieved. Unfortunately, since price data are often difficult to obtain, this will
be challenging.

Author Contributions: Conceptualization, T.H. and S.L.; methodology, T.H. and H.D.; software, T.H.;
formal analysis, S.L. and F.L.; data curation, S.L. and F.L.; writing—original draft preparation, T.H.;
writing—review and editing, T.H. and H.D.; supervision, S.L. and F.L.; project administration, S.L.
and F.L. All authors have read and agreed to the published version of the manuscript.
Funding: This research received no external funding.
Data Availability Statement: Please ask the corresponding author for study data.
Conflicts of Interest: The authors declare no conflicts of interest.

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