『Abstract
　Substituting energy with capital (SEC) in economic productions has become common practice both for business owners and policy-makers to improve their energy and environmental efficiency. However, seldom previous studies on energy efficiency and/or environmental performance evaluation rook this role into account. This paper aims to shed some light on the effects of SEC on China's aggregated energy and environmental efficiency (ARRR) within a parametric stochastic frontier analysis framework. Moreover, influencing factors of regional efficiency score are also discussed using a pooled regression model. The results indicate that SEC poses significant effects on improving China's AEEE, and this impact appears obvious regional variation that regions with lower efficiency scores hold more extensive potential to improve their AEEE by means of SEC. Furthermore, upgrading industrial structure and decreasing the proportion of coal in energy consumption make great sense to improve China's AEEE.

Keywords: Factor substitution; Stochastic frontier analysis (SFA); China』

1. Introduction
2. SFA models for aggregated energy and environmental efficiency measurement
　2.1. Production technology
　2.2. Input-oriented distance functions for AEEE measurement
　　2.2.1. Hyperbolic input-oriented distance function for scenario C
　　2.2.2. Conventional input distance function for scenario N
　2.3. Translog function specification
3. An application to China's AEEE evaluation
　3.1. Data description
　3.2. Estimated parameters analysis
　3.3. Results and discussions
　　3.3.1. Effects of SEC on national/regional AEEE
　　3.3.2. Comparisons on the PES and PSER under the two scenarios
　3.4. Influencing factors of AEEE
4. Conclusions and policy implications
Acknowledgments
Appendix A
References