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Environment and economic efficiency: an analysis of some polluting Italian industries

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Abstract

this research presents an extension of the directional distance function model to measure performances for firms which produce a large number of pollutants and operate in different industrial sectors. I use this methodology to estimate productivity indexes on a sample of Italian firms that were forced to declare their emissions to the European Pollution Release and Transfer Register in 2007. A proxy for the environmental regulation’s cost is derived and results show a significant impact in term of potential value added lost. Estimations also reveal differences in mean environmental performances among industries; furthermore, the effect of pollution control follows the same path.

Suggested Citation

  • Alessandro Manello, 2011. "Environment and economic efficiency: an analysis of some polluting Italian industries," CERIS Working Paper 201103, CNR-IRCrES Research Institute on Sustainable Economic Growth - Torino (TO) ITALY - former Institute for Economic Research on Firms and Growth - Moncalieri (TO) ITALY.
    • Handle: RePEc:csc:cerisp:201103
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    1. Gale Boyd & George Tolley & Joseph Pang, 2002. "Plant Level Productivity, Efficiency, and Environmental Performance of the Container Glass Industry," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 23(1), pages 29-43, September.
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    4. Ball, V. Eldon & Lovell, C.A. Knox & Luu, H. & Nehring, Richard F., 2004. "Incorporating Environmental Impacts in the Measurement of Agricultural Productivity Growth," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(3), pages 1-25, December.
    5. Chambers, Robert G. & Chung, Yangho & Fare, Rolf, 1996. "Benefit and Distance Functions," Journal of Economic Theory, Elsevier, vol. 70(2), pages 407-419, August.
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    More about this item

    Keywords

    Directional distance function; Environmental regulation; Polluting industries;
    All these keywords.

    JEL classification:

    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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