Evaluation of the double-cycle benefits of international engineering cooperation and the Western economy - based on the SFA methodology

Abstract

Abstract In the era of globalization and development, international engineering cooperation is crucial to the improvement of economic efficiency in the West. This paper selects panel data from six regions in the West from 2019-2022 and selects reasonable input-output indicators and environmental variable indicators. At the first stage of the three-stage DEA model, the static measurement of Western economic efficiency is first measured using the variable scale compensation (BCC) model. The SFA model is utilized to decompose the slack variables during the first stage and adjust the input variables without affecting environmental variables. In addition, the Malmquist index model is used to analyze the efficiency of the Western economy dynamically in order to have a more comprehensive evaluation of the double-cycle efficiency of the Western economy from the perspective of dynamic and static. The results of the study show that after removing the effects of environmental factors and random errors, the average values of technical efficiency, pure technical efficiency, and scale efficiency in the third stage of all western regions have increased by 0.0175, 0.0193, and 0.0194 compared with those in the first stage, and the annual average total factor productivity index has shown a decreasing and then increasing trend. The SFA method used in the study can effectively eliminate the influence of environmental factors and random factors and evaluate the double-cycle efficiency situation of international engineering cooperation and the Western economy more comprehensively.