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The role of environmental factors in growth accounting

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  • Byung M. Jeon

    (Korea Institute of Public Finance, Seoul, Korea)

  • Robin C. Sickles

    (Department of Economics, Rice University, USA)

Abstract

This paper explores a relatively new methodology, the directional distance function method, to analyse productivity growth. The method allows us to explicitly evaluate the role that undesirable outputs of the economy, such as carbon dioxide and other greenhouse gases, have on the frontier production process which we specify as a piecewise linear and convex boundary function. We decompose productivity growth into efficiency change (catching up) and technology change (innovation). We test the statistical significance of the estimates using recently developed bootstrap methods. We also explore implications for growth of total factor productivity in the OECD and Asian economies. Copyright © 2004 John Wiley & Sons, Ltd.

Suggested Citation

  • Byung M. Jeon & Robin C. Sickles, 2004. "The role of environmental factors in growth accounting," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 19(5), pages 567-591.
  • Handle: RePEc:jae:japmet:v:19:y:2004:i:5:p:567-591
    DOI: 10.1002/jae.769
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    References listed on IDEAS

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    1. Leopold Simar & Paul Wilson, 2000. "A general methodology for bootstrapping in non-parametric frontier models," Journal of Applied Statistics, Taylor & Francis Journals, vol. 27(6), pages 779-802.
    2. GIJBELS, Irène & MAMMEN, Enno & PARK, Byeong U. & SIMAR, Léopold, 1997. "On estimation of monotone and concave frontier functions," LIDAM Discussion Papers CORE 1997031, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    3. V. Eldon Ball & Rolf Fare & Shawna Grosskopf & Richard Nehring, 2001. "Productivity of the US Agricultural Sector: The Case of Undesirable Outputs," NBER Chapters, in: New Developments in Productivity Analysis, pages 541-586, National Bureau of Economic Research, Inc.
    4. Léopold Simar & Paul W. Wilson, 1998. "Sensitivity Analysis of Efficiency Scores: How to Bootstrap in Nonparametric Frontier Models," Management Science, INFORMS, vol. 44(1), pages 49-61, January.
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