Capacity utilization in a generalized Malmquist index including environmental factors. A decomposition analysis
AbstractProductivity measures ignoring environmental effects may give misleading information on total productivity growth. Further, business cycles in the form of capacity utilization may also significantly influence productivity measures. In this paper, we develop an overall Malmquist productivity index and decompose changing efficiency rates into a contribution from environmental factors, capacity utilization and other traditional factors. The capacity utilization element is a contribution to the literature in that it takes into account the capacity for producing negative externalities. We decompose the frontier movements into a contribution from traditional factors and environmental factors and apply the model to a micro data set for two Norwegian industries: the pulp and paper industry and the inorganic chemistry industry. We find frontier improvements over the period included in the analysis, while the distance to the frontier has increased. Capacity utilization increased over the period and contributed to an average approach to the frontier, while environmental indicators contributed negatively. Analysis of the two industries indicates that differences between the traditional and revised efficiency measures changes are ambiguous, except from the capacity utilization element. This indicates that the environment loses when business cycles improve.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Research Department of Statistics Norway in its series Discussion Papers with number 473.
Date of creation: Sep 2006
Date of revision:
Emissions; Productivity change; Pulp and paper; Inorganic chemistry; Malmquist index; Frontier technology; Capacity utilization;
Other versions of this item:
- Torstein Bye & Annegrete Bruvoll & Jan Larsson, 2009. "Capacity Utilization in a Generalized Malmquist Index Including Environmental Factors: A Decomposition Analysis," Land Economics, University of Wisconsin Press, vol. 85(3), pages 529-538.
- L73 - Industrial Organization - - Industry Studies: Primary Products and Construction - - - Forest Products
- O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
- O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- O41 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
- Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
- R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Production Analysis, and Firm Location - - - Government Policy; Regulatory Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-09-30 (All new papers)
- NEP-EFF-2006-09-30 (Efficiency & Productivity)
- NEP-ENV-2006-09-30 (Environmental Economics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Reinhard, Stijn & Knox Lovell, C. A. & Thijssen, Geert J., 2000. "Environmental efficiency with multiple environmentally detrimental variables; estimated with SFA and DEA," European Journal of Operational Research, Elsevier, vol. 121(2), pages 287-303, March.
- Hailu, Atakelty & Veeman, Terrence S., 2001. "Alternative methods for environmentally adjusted productivity analysis," Agricultural Economics, Blackwell, vol. 25(2-3), pages 211-218, September.
- De Borger B. & Kerstens K., 2000.
"The Malmquist productivity index and plant capacity utilisation,"
2000020, University of Antwerp, Faculty of Applied Economics.
- De Borger, Bruno & Kerstens, Kristiaan, 2000. " The Malmquist Productivity Index and Plant Capacity Utilization," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(2), pages 303-10, June.
- Annegrete Bruvoll & Torstein Bye & Jan Larsson & Kjetil Telle, 2003. "Technological changes in the pulp and paper industry and the role of uniform versus selective environmental policy," Discussion Papers 357, Research Department of Statistics Norway.
- Fare, Rolf & Grosskopf, Shawna & Kokkelenberg, Edward C, 1989. "Measuring Plant Capacity, Utilization and Technical Change: A Nonparametric Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(3), pages 655-66, August.
- Pittman, Russell W, 1983. "Multilateral Productivity Comparisons with Undesirable Outputs," Economic Journal, Royal Economic Society, vol. 93(372), pages 883-91, December.
- Fare, Rolf, et al, 1993. "Derivation of Shadow Prices for Undesirable Outputs: A Distance Function Approach," The Review of Economics and Statistics, MIT Press, vol. 75(2), pages 374-80, May.
- Kakali Mukhopadhyay, 2008. "Air pollution and income distribution in India," Asia-Pacific Development Journal, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 15(1), pages 35-64, June.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (J Bruusgaard).
If references are entirely missing, you can add them using this form.