The effect of environmental regulation on the productive efficiency of firms and estimates of cost of pollution abatement can be sensitive to specifications of the technologies of polluting firms. This paper attempts to examine the effect of environmental regulation on productive efficiency and the cost of production by taking the case of Indian pulp and paper industry. Estimates of productive efficiency of firms are obtained under the alternative specification of technologies by output distance function and input distance function. A translog functional form has been used for this purpose.
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