Does Urbanization Improve Industrial Water Consumption Efficiency?

Although some studies have focused on the logical connection between industrial water consumption in the industrial economic development (IED) and industrial wastewater treatment (IWT) stages, the master-slave game relationship between these stages has not been considered. This study selected panel data from 30 provinces in China from 2011 to 2015, divided these provinces into IED- and IWT-dominated regions, and developed a two-stage data envelopment analysis (DEA) model based on the master-slave game relationship between the IED and IWT stages. In addition, a regression model based on the Simar-Wilson approach was constructed to reveal the effects of urbanization on industrial water consumption efficiency. The results show that the industrial water consumption efficiency in China slightly fluctuated from 2011 to 2015, and there was no significant efficiency improvement. The efficiency of the IED stage was generally higher than that of the IWT stage, and the efficiency gap between stages was smaller in IED-dominated regions than in IWT-dominated regions. Urbanization has different effects on industrial water consumption efficiency, and the same factor can have significantly different effects in different regions. Some policy implications are proposed for the different types of regions.