Efficiency Evaluation and Influencing Factors Analysis of Urban

Renewal Financial Expenditure in Liaoning Province

Yinghui Xiang, Yuhuan Meng and Zheng Liu

School of Management, Shenyang Jianzhu University, Shenyang 110168, China

Keywords: Urban Renewal, Financial Expenditure Efficiency, Influencing Factors, DEA-Tobit Model.

Abstract: In recent years, many provinces and cities in China have invested a large number of financial funds to support

urban renewal actions. Whether financial funds can be effectively used in urban renewal actions is related to

the implementation effect of urban renewal work. This paper uses DEA model to calculate the financial ex-

penditure efficiency of urban renewal in 14 cities of Liaoning Province, and further uses Tobit model to ana-

lyze the influencing factors of financial expenditure efficiency of urban renewal. The results show that Shen-

yang, Benxi, Liaoyang, Yingkou and Panjin have achieved DEA efficiency in the whole study period, and the

other cities still have relatively large room for improvement. Urban population density and urbanization rate

have a significant positive impact on the financial expenditure efficiency of urban renewal. Based on empirical

analysis, some suggestions are put forward to improve the financial expenditure efficiency of urban renewal.

1 INTRODUCTION

To solve the problem of urban development in the

stock age, urban renewal has become an important

strategy of urban development in the new period. In

2021, the Ministry of Housing and Urban-Rural De-

velopment and the People's Government of Liaoning

Province jointly issued the "Implementation Plan of

Urban Renewal Pilot Area jointly built by ministries

and provinces". The "Plan" proposes that by 2025, the

system and mechanism of jointly building urban re-

newal pilot areas by the ministries and provinces will

be initially established, and the vitality of the system

will be initially shown. In recent years, Liaoning

Province has made great achievements in urban re-

newal work, but it has also invested a large amount of

financial funds to promote urban renewal. Financial

support is crucial to urban renewal. Therefore, it has

an important practical significance to scientifically

evaluate the efficiency of financial expenditure in ur-

ban renewal in Liaoning Province and further explore

the influence of different factors on the efficiency of

financial expenditure.

At present, there are abundant achievements in the

research of urban renewal evaluation and analysis of

government expenditure efficiency at home and

abroad. With regard to the evaluation of urban re-

newal, Grace K.L. Lee and Edwin H.W. Chan (2008)

constructed an evaluation index system from the per-

spective of economic, social and environmental sus-

tainability, and applied AHP to evaluate the urban re-

newal in Hong Kong, China. Wang Meng et al.

(2011) took the former Xicheng District of Beijing as

an example, and used the DEA method of multi-ob-

jective decision-making to evaluate the comprehen-

sive performance of the old city reconstruction effect

in this area. Liu Guiwen et al. (2017) analyzed the

basic policy tools, categories and types of activities of

urban renewal in Shenzhen, constructed an evaluation

model of renewal policy to analyze the contradictions

and shortcomings of policy tools, and put forward rel-

evant suggestions for future policy formulation. Re-

garding the efficiency of government expenditure,

Balague-Coll et al. (2007) took the local government

of Valencia as an example, measured its government

efficiency by two-stage DEA method and unbounded

analysis method, and further used nonparametric

smoothing technology to analyze the influencing fac-

tors. Afonso et al. (2008) firstly used DEA method to

evaluate the financial expenditure efficiency of local

governments in Portugal, and then explained the effi-

ciency value through Tobit analysis, finding that in-

creasing education input and per capita purchasing

power is conducive to improving the efficiency of fis-

cal expenditure. Wang Qian et al. (2018) measured

the efficiency of local financial expenditure under the

restriction of public risk by SE-U-SBM-DEA model,

Xiang, Y., Meng, Y. and Liu, Z.

Efﬁciency Evaluation and Inﬂuencing Factors Analysis of Urban Renewal Financial Expenditure in Liaoning Province.

DOI: 10.5220/0012071000003624

In Proceedings of the 2nd International Conference on Public Management and Big Data Analysis (PMBDA 2022), pages 127-133

ISBN: 978-989-758-658-3

 2023 by SCITEPRESS – Science and Technology Publications, Lda. Under CC license (CC BY-NC-ND 4.0)

127

and analyzed its influencing factors by random effect

Tobit model.

In view of the shortcomings of the existing litera-

ture and learning from its experience, this paper in-

tends to use DEA-Tobit two-stage method to analyse

the financial expenditure efficiency and influencing

factors in urban renewal in Liaoning Province, with a

view to providing operational countermeasures and

suggestions for promoting the high-quality imple-

mentation of urban renewal in Liaoning and even the

whole country.

2 RESEARCH METHODS

2.1 Data Envelopment Analysis

Data Envelopment Analysis (DEA) is a kind of non-

parametric testing method developed on the basis of

the concept of relative efficiency evaluation theory, It

was firstly put forward by Charnes, Cooper and

Rhodes in 1978. This method analyzes the input situ-

ation and output level data by selecting the decision

unit (DMU), and uses the linear planning method to

take the best input and output as the production fron-

tier, so as to form the data envelope curve. Among

them, the effective point has an efficiency value of 1

and lies on the front surface, while the ineffective

point will be given a relative efficiency value between

(0,1) and lies outside the front surface. According to

the variability of returns to scale, DEA model also in-

cludes CCR model with fixed returns to scale and

BCC model with variable returns to scale. For the

government, the input variable is more controllable

than the output variable. Therefore, after comprehen-

sive consideration, this paper will select BCC model

as the theoretical research model based on input ori-

entation. The model description is as follows,











=≤≥≥

=−

−+

−



njss

yjj

xjj

,...,2,1,0,0,0

min

θλ

(1)

2.2 Panel Tobit Model

In order to deeply analyze the influencing factors and

degree of financial expenditure efficiency of urban re-

newal in Liaoning Province, according to the effi-

ciency value obtained by DEA model in the first

stage, the influencing factors are analyzed and evalu-

ated by panel Tobit model in the second stage. The

basic form of the model is as follows,











≤

iiii

，

＞，

εββ

(2)

In this paper, the financial expenditure efficiency

of urban renewal in Liaoning Province measured in

the first stage is taken as the dependent variable, and

the objective factors that may affect this efficiency

are selected as the independent variable to establish

the panel Tobit model, and the maximum likelihood

estimation (ML) method is used to estimate the vari-

able parameters.

3 THE EFFICIENCY

EVALUATION OF FINANCIAL

EXPENDITURE FOR URBAN

RENEWAL IN LIAONING

PROVINCE

3.1 Index Selection and Data Sources

The research object of this paper is the financial ex-

penditure efficiency of urban renewal in Liaoning

Province, so 14 cities in Liaoning Province are se-

lected as decision-making units. In view of the avail-

ability and completeness of data, 2016-2020 is se-

lected as the research interval. The relevant data

comes from the Statistical Yearbook of Liaoning

Province, the Financial Yearbook of China from 2017

to 2021 and the statistical database of China Eco-

nomic Net, and the evaluation index system of finan-

cial expenditure efficiency of urban renewal in Liao-

ning Province is constructed as shown in Table 1.

Table 1: Evaluation Index System of Urban Renewal Financial Expenditure Efficiency in Liaoning Province.

Tar

et Invest Out

Index

Expenditure on shantytown renovation Regional GDP per capita

Expenditure on urban construction Urban financial revenue

Expenditure on technology research and

develo

ment

Per capita residential floor area

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128

Expenditure on pollution prevention and

control

Per capita urban road area

Expenditure on community public facili-

ties in urban and rural areas

Park green area per capita

Expenditure on affordable housing pro-

ects

Heating area

Length of urban drainage pipeline

Daily treatment capacity of urban sewage

Harmless treatment capacity of domestic gar-

3.2 Analysis of Empirical Results

This paper selects the VRS input-dominant model of

DEA model, uses DEAP2.1 software to calculate the

financial expenditure efficiency of urban renewal in

14 cities in Liaoning Province from 2016 to 2020, the

calculation results are analyzed at the overall and re-

gional levels in Liaoning Province.

Table 2: Scores of Urban Renewal Financial Expenditure

Efficiency.

CIT

TIME

CRST

VRST

SCAL

She

nya

2016 1 1 1 -

2017 1 1 1 -

2018 1 1 1 -

2019 1 1 1 -

2020 1 1 1 -

Da-

lian

2016 0.965 1 0.965

drs

2017 0.947 1 0.947

drs

2018 0.954 1 0.954

drs

2019 0.986 1 0.986

drs

2020 1 1 1 -

An-

sha

2016 0.907 0.908 0.999

irs

2017 0.994 0.997 0.997

drs

2018 1 1 1 -

2019 0.99 1 0.99

drs

2020 0.949 1 0.949

drs

Fu-

shu

2016 1 1 1 -

2017 0.946 0.946 1 -

2018 0.946 0.949 0.997

drs

2019 1 1 1 -

2020 1 1 1 -

Ben

2016 1 1 1 -

2017 1 1 1 -

2018 1 1 1 -

2019 1 1 1 -

2020 1 1 1 -

Dan

don

2016 0.758 0.759 0.999

drs

2017 0.804 one 0.804

drs

2018 0.789 0.834 0.946

drs

2019 0.859 0.907 0.947

drs

2020 0.789 0.795 0.993

irs

2016 0.828 0.97 0.854

drs

2017 0.724 0.746 0.97

drs

Jin-

zho

2018 0.71 0.727 0.977

drs

2019 0.593 0.622 0.953

drs

2020 0.766 0.77 0.995

irs

Yin

gko

2016 1 1 1 -

2017 1 1 1 -

2018 1 1 1 -

2019 1 1 1 -

2020 1 1 1 -

xin

2016 1 1 1 -

2017 0.939 0.972 0.965

irs

2018 0.915 0.962 0.951

irs

2019 0.926 0.972 0.953

irs

2020 0.888 0.963 0.922

irs

Lia

oya

2016 1 1 1 -

2017 1 1 1 -

2018 1 1 1 -

2019 1 1 1 -

2020 1 1 1 -

CIT

TIM

CRS

VRS

SCA

Pan-

jin

2016 1 1 1

2017 1 1 1

2018 1 1 1

2019 1 1 1

2020 1 1 1

Tieli

2016 0.732 0.747 0.98

irs

2017 0.733 0.788 0.931

irs

2018 1 1 1

2019 0.846 0.858 0.986

irs

2020 0.81 0.838 0.967

irs

Cha

oyan

2016 0.704 0.732 0.962

irs

2017 0.734 0.753 0.975

drs

2018 0.738 0.741 0.997

drs

2019 0.723 0.86 0.841

drs

2020 0.701 0.813 0.863

drs

Hul

udao

2016 0.91 1 0.91

drs

2017 0.946 0.946 1 -

2018 0.946 0.949 0.997

drs

2019 1 1 1 -

2020 1 1 1 -

3.2.1 Overall Analysis

According to the results calculated by DEA, the trend

chart of average values of three efficiency scores of

14 cities in Liaoning Province from 2016 to 2020 was

Efﬁciency Evaluation and Inﬂuencing Factors Analysis of Urban Renewal Financial Expenditure in Liaoning Province

129

drawn, as shown in Figure 1. As can be seen from

Figure 1, the overall efficiency of financial expendi-

ture for urban renewal in Liaoning Province de-

creased first and then increased, with little fluctua-

tion, and the efficiency values were all above 0.9; the

trend of scale efficiency is similar to the overall com-

prehensive efficiency, and the technical efficiency

curve is below the scale efficiency curve in the whole

stage, which indicates that the low technical effi-

ciency is the main reason why the financial expendi-

ture efficiency of urban renewal in Liaoning Province

cannot be greatly improved, and the key to improving

the efficiency lies in improving the backward tech-

nology of financial capital utilization. Therefore, the

government should pay more attention to the tech-

nical innovation and management efficiency of urban

renewal expenditure funds, and lay emphasis on im-

proving the use level of urban renewal related funds.

Figure 1: Trends of the overall urban renewal financial ex-

penditure efficiency.

3.2.2 Regional Level Analysis

From the perspective of comprehensive efficiency,

the cities with effective comprehensive efficiency in

the whole stage include Shenyang, Benxi, Liaoyang,

Yingkou and Panjin (comprehensive efficiency value

is 1), followed by Fushun, and Chaoyang has the low-

est comprehensive efficiency, with an average value

of only 0.720, By consulting and analyzing the origi-

nal data, it is found that there is obvious input redun-

dancy and diminishing returns to scale in this city.

From the perspective of technical efficiency, Shen-

yang, Dalian, Benxi, Liaoyang, Yingkou and Panjin

have reached the effective level (the technical effi-

ciency value is 1), and Jinzhou has the lowest tech-

nical efficiency, with an average value of only 0.767,

which is relatively backward. From the perspective of

scale efficiency, Shenyang, Benxi, Liaoyang, Ying-

kou and Panjin have reached an effective level (the

scale efficiency value is 1), which shows that the

scale and structure of urban renewal financial ex-

penditure in these cities are gradually becoming rea-

sonable, while the rest of the regions have not reached

the optimal efficiency level, and the scale of financial

expenditure needs to be adjusted. From the perspec-

tive of returns to scale, except Shenyang, Benxi, Liao-

yang, Yingkou and Panjin, the financial input of ur-

ban renewal in other cities generally deviated from

the optimal scale during the whole inspection period,

and most cities suffered from diminishing returns to

scale, while Fuxin and Tieling were in an increasing

state in most years. From the analysis of Table 2, it

can be seen that there is no direct relationship be-

tween the financial expenditure efficiency of urban

renewal and the degree of economic development,

and the high-efficiency output may not come from

high input, which may be due to the different eco-

nomic development modes and financial expenditure

structures in different places. Blindly expanding in-

vestment is not a wise move. It is necessary for local

governments to optimize and adjust the supply struc-

ture and improve the investment mode according to

the urban development.

4 ANALYSIS OF INFLUENCING

FACTORS OF FINANCIAL

EXPENDITURE EFFICIENCY

OF URBAN RENEWAL IN

LIAONING PROVINCE

4.1 Selection of Influencing Factors

At present, there are few research results about the in-

fluencing factors of financial expenditure efficiency

in urban renewal, but there are many in-depth re-

search results. Therefore, based on a large number of

literatures, this paper summarizes various influencing

factors that are often selected in the existing results.

Combined with the attributes and development char-

acteristics of urban renewal, and taking into account

the availability of data, this paper selects five factors:

regional economic development level, urban popula-

tion density, urbanization rate, urban renewal finan-

cial investment scale and education level of residents

to examine their impact on urban renewal financial

expenditure efficiency.

0,850

0,900

0,950

1,000

2016 2017 2018 2019 2020

MEAN

TIME

CRSTE VRSTE SCALE

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130

Table 3: Description of influencing factors variables.

Statistical variable Variable name

Variable Sym-

Variable Explanation

Dependent Variable

Financial expenditure

efficiency in urban

renewal

eff Comprehensive efficiency value

Independent Varia-

ble

Regional economic

develo

ment level

gdp Urban per capita GDP

Urban population

densit

Total urban population/Regional

area

Urbanization rate urban

Number of permanent urban resi-

dents/Total permanent popula-

tion of the re

ion

Urban renewal finan-

cial investment scale

scale

Financial expenditure on urban

renewal/Total expenditure of city

finance

Education level of

residents

edu

Number of students enrolled in

various schools/Total regional

opulation

4.2 Establishment of Tobit Regression

Model

Based on the calculation of the financial expenditure

efficiency of urban renewal in Liaoning Province

from 2016 to 2020 by using the DEA-BCC model, the

Tobit model is constructed to further explore the fac-

tors affecting the financial expenditure efficiency of

urban renewal. In order to smooth the data, the re-

gional economic development level(gdp) and urban

population density(pd) are logized to improve the sta-

tionarity of explanatory variables. The Tobit model in

this paper is set as follows,

itiitit

itititit

eduscale

urbanpdgdpeff

εμββ

++++

+++=

3210

)ln()ln(

(3)

4.3 Analysis of Tobit Regression

Results

Eviews10.0 software is used to make regression anal-

ysis on the influencing factors of financial expendi-

ture efficiency of urban renewal in Liaoning Prov-

ince. The Tobit regression results are summarized in

Table 4.

Table 4: Tobit regression results of influencing factors.

Influencing Factor Coef

Std.

Err

Sig-

nifi-

cant

Level

(P>Z)

Regional economic

development level

0.069

443

0.0

497

1.39

0.1631

455

Urban population

density

0.072

085*

0.0

358

2.01

151

0.0443

Urbanization rate

0.007

834*

0.0

014

5.30

631

Urban renewal fi-

nancial investment

scale

0.022

026

0.0

227

0.96

874

0.3327

Education level of

residents

0.035

552

0.0

240

1.48

005

0.1389

Note: * * *, * * and * are significant at the levels of 1%, 5%

and 10% respectively.

The regression coefficient of regional economic

development level (gdp) to urban renewal financial

expenditure efficiency is negative, indicating that

there is a negative relationship between them, but it is

not significant, which means that regional economic

development level will not have a significant impact

on urban renewal fiscal expenditure efficiency. It may

be because some areas with higher level of economic

development pay more attention to the urban environ-

ment, which can promote the implementation of ur-

ban renewal. However, there are also some areas that

unilaterally pursue economic benefits, ignoring the

necessary transformation actions for urban adverse

environmental areas, to some extent, it weakens the

efficiency of urban renewal financial expenditure.

The regression coefficient of urban population

density (pd) to urban renewal financial expenditure

efficiency is significantly positive, which indicates

that the increase of urban population density can im-

prove agglomeration economic benefits and financial

Efﬁciency Evaluation and Inﬂuencing Factors Analysis of Urban Renewal Financial Expenditure in Liaoning Province

131

expenditure efficiency. The reason may be that the

higher the population density, the higher the public's

requirements for living conditions, which is condu-

cive to improving the efficiency of urban renewal fi-

nancial expenditure.

The regression coefficient of urbanization rate

(urban) to the efficiency of urban renewal financial

expenditure is significantly positive, which indicates

that the increase of urbanization rate can obviously

improve the efficiency of urban renewal financial ex-

penditure. On the one hand, the improvement of ur-

banization level means that a large number of rural

people gather in cities, resulting in scale effect,on the

other hand, with the gradual improvement of urban

spatial layout and functional structure, the relative en-

vironment of urban financial input and output be-

comes better, which is more conducive to the rational

allocation of urban financial resources by the govern-

ment and the promotion of urban financial expendi-

ture efficiency.

The regression coefficient of urban renewal finan-

cial investment scale (scale) to urban renewal finan-

cial expenditure efficiency is positive, indicating that

there is a positive relationship between them, but it is

not significant. It may be because the funds invested

in some areas have not been effectively allocated, and

there are unreasonable or wasteful phenomena, which

leads to low efficiency of financial expenditure.

Therefore, local governments should determine the

scale of financial investment in urban renewal accord-

ing to local conditions.

The regression coefficient of education level of

residents (edu) to the efficiency of urban renewal fi-

nancial expenditure is positive, indicating that there

is a positive relationship between them, but it is not

significant. Generally speaking, the higher the educa-

tion level of residents, the higher their support and en-

thusiasm for urban renewal, and they can play a better

role under the local reasonable public participation

mechanism of urban renewal. However, some urban

public participation mechanisms are imperfect, the

implementation effect is not in place, and they fail to

play an effective role, thus restricting the efficiency

of urban renewal financial expenditure to some ex-

tent.

5 CONCLUSIONS AND

SUGGESTIONS

According to the results of empirical analysis in this

paper, and by comparing the average calculation re-

sults of comprehensive efficiency, technical effi-

ciency and scale efficiency of cities in Liaoning prov-

ince during the whole research period, it can be seen

that there are significant differences among different

cities, and Shenyang, Benxi, Liaoyang, Yingkou and

Panjin are DEA efficient, meanwhile, they are both

technically efficient and scale efficient. The scale ef-

ficiency values of Dalian, Fuxin and Huludao are

lower than the technical efficiency values, which in-

dicates that the scale efficiency leads to the low level

of comprehensive efficiency in these cities, and the

investment scale should be adjusted reasonably. An-

shan, Fushun, Dandong, Jinzhou, Tieling and Chao-

yang have low comprehensive efficiency because the

technical efficiency is lower than the scale efficiency.

Therefore, should be made to adjust and improve the

government management structure or level. Through

further analysis of influencing factors, it is found that

urban population density and urbanization rate play a

significant role in promoting urban renewal, There is

a positive but not significant relationship between ur-

ban renewal financial investment scale and education

level of residents, while there is an insignificant neg-

ative relationship between regional economic devel-

opment level and urban renewal financial expenditure

efficiency. In view of this, this paper puts forward the

following countermeasures and suggestions:

Optimize the structure of government financial

expenditure and determine the scale of urban renewal

financial expenditure according to local conditions.

Give full play to the role of human capital and en-

courage the development of innovative and high-tech

enterprises.

Accelerate the formation of regional economic

layout with complementary advantages and high-

quality development, and promote the high-quality

development of cities.

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