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Waste Decomposition Analysis in Japanese manufacturing sectors for Material Flow Cost Accounting

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  • Yagi, Michiyuki
  • Kokubu, Katsuhiko

Abstract

From the perspective of material flow cost accounting (MFCA), which treats both material and financial flows within a company, this study proposes a corporate waste decomposition model to investigate the effects of material and financial factors on corporate waste generation. The proposed model decomposes waste into the material loss (waste ratio of raw materials [WRMat]), raw material-to-cost ratio (RtCR; material use efficiency), cost-to-sales ratio (or COGSR), total asset turnover ratio (TATR), leverage, and total equity. As an application, the waste decomposition analysis is performed using the log-mean Divisia index (LMDI) method, and 125 listed firms in 5 Japanese manufacturing sectors from 2010 to 2015 are analyzed. The LMDI results show that the RtCR, the most crucial term in MFCA, had the largest effect on increases in waste generation as of 2015; however, this effect is not so robust among sectors over the years, implying that MFCA is valid mainly for specific companies/sectors or years. Also, corporate environmental burdens (waste and carbon emission) are likely to be correlated negatively with leverage and positively with total equity in the models, implying that the financial and stock markets have an essential role in deciding corporate environmental burdens.

Suggested Citation

  • Yagi, Michiyuki & Kokubu, Katsuhiko, 2019. "Waste Decomposition Analysis in Japanese manufacturing sectors for Material Flow Cost Accounting," MPRA Paper 92999, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:92999
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    References listed on IDEAS

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    1. Yagi, Michiyuki & Kokubu, Katsuhiko, 2018. "Corporate material flow management in Thailand: The way to material flow cost accounting," MPRA Paper 87926, University Library of Munich, Germany.
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    5. Hidemichi Fujii & Shunsuke Managi, 2013. "Decomposition of Toxic Chemical Substance Management in Three U.S. Manufacturing Sectors from 1991 to 2008," Journal of Industrial Ecology, Yale University, vol. 17(3), pages 461-471, June.
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    Cited by:

    1. Tian Zhao & Zhixin Liu, 2022. "Drivers of CO 2 Emissions: A Debt Perspective," IJERPH, MDPI, vol. 19(3), pages 1-18, February.
    2. Yagi, Michiyuki & Kokubu, Katsuhiko, 2020. "A Framework of Sustainable Consumption and Production from the Production Perspective: Application to Thailand and Vietnam," MPRA Paper 103931, University Library of Munich, Germany.
    3. Wu, Jianxin & Xu, Hui & Tang, Kai, 2021. "Industrial agglomeration, CO2 emissions and regional development programs: A decomposition analysis based on 286 Chinese cities," Energy, Elsevier, vol. 225(C).
    4. Asghar Hakimi & Zahra Abedi & Fatemeh Dadashian, 2021. "Increasing Energy and Material Consumption Efficiency by Application of Material and Energy Flow Cost Accounting System (Case Study: Turbine Blade Production)," Sustainability, MDPI, vol. 13(9), pages 1-15, April.

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    More about this item

    Keywords

    material flow cost accounting; waste efficiency; Japanese manufacturing industries; log-mean Divisia index;
    All these keywords.

    JEL classification:

    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • 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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