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Although the relationships between water and energy systems have been widely researched globally, such studies have not properly considered the coupling and driving mechanisms of the nexus between water and energy. Based on panel data from 30 Chinese provinces and cities, we used a three-stage Slacks-Based Measure model for Data Envelopment Analysis (SBM-DEA) to estimate the Water-Energy coupling efficiency in China from 2003–2015. Using the Stochastic Frontier Approach (SFA) regression model, we constructed an index of environmental factors that affect the Water-Energy coupling efficiency from the four aspects of resource environment, social environment, economic environment, and ecological environment. The results indicate that the Water-Energy coupling efficiency scores in most provinces in China are high and stable, and that the coupling efficiency of water and energy in China has a distribution pattern of northeast > east > west > central. Compared to the results in the first stage of analysis, the efficiency values in the third stage (after removal of environmental and stochastic factors) were smaller, illustrating that the coupling efficiency of water and energy in China depends on a favorable external environment. In the sample period, we also found that the improvement of the resource and social environments was the most conducive way to improve the Water-Energy coupling efficiency. Overall, the management level of technological innovation in China still has some room for improvement.

Analysis of the Water-Energy Coupling Efficiency in China: Based on the Three-Stage SBM-DEA Model with Undesirable Outputs