IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp7235.html
   My bibliography  Save this paper

Measurement of Environmentally Sensitive Productivity Growth in Korean Industries

Author

Listed:
  • Chung, Yeimin

    () (Korea University)

  • Heshmati, Almas

    () (Jönköping University, Sogang University)

Abstract

This study measures productivity growth using the Metafrontier Malmquist-Luenberger productivity growth index (MML index) method and decomposes the index. The results are compared with those obtained from the conventional Malmquist-Luenberger (ML) productivity growth index. MML has two advantages compared with the ML index. The former is able to consider undesirable output as a by-product of production which accounts for producer group heterogeneities. As a result, it enables separation and estimation of changes in the technological gap between regional and global frontier technologies. The proposed index is employed to measure productivity growth and decompose its components in 14 Korean industrial sectors during the period between 1981 and 2007. For the purpose of detailed analysis of policy effects, the study period was divided into three decades. The results show that technology innovation can be regarded as a more important factor of productivity growth, rather than efficiency change. The chemical and Petrochemical, Machinery and Transport equipment industries are treated as global innovators in the whole period. However, the result differs according to decades. It is found that the groups with higher energy efficient technology and profitability obtain a higher productivity growth rate in comparison with their low energy efficient technology industry counterparts. Policy implications of the empirical results are discussed.

Suggested Citation

  • Chung, Yeimin & Heshmati, Almas, 2013. "Measurement of Environmentally Sensitive Productivity Growth in Korean Industries," IZA Discussion Papers 7235, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7235
    as

    Download full text from publisher

    File URL: http://ftp.iza.org/dp7235.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Brock, William A & LeBaron, Blake D, 1996. "A Dynamic Structural Model for Stock Return Volatility and Trading Volume," The Review of Economics and Statistics, MIT Press, vol. 78(1), pages 94-110, February.
    2. William L. Weber & Bruce Domazlicky, 2001. "Productivity Growth and Pollution in State Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 195-199, February.
    3. Fare, Rolf & Grosskopf, Shawna & Weber, William L., 2006. "Shadow prices and pollution costs in U.S. agriculture," Ecological Economics, Elsevier, vol. 56(1), pages 89-103, January.
    4. Huang, Yi-Ju & Chen, Ku-Hsieh & Yang, Chih-Hai, 2010. "Cost efficiency and optimal scale of electricity distribution firms in Taiwan: An application of metafrontier analysis," Energy Economics, Elsevier, vol. 32(1), pages 15-23, January.
    5. Sueyoshi, Toshiyuki & Goto, Mika, 2010. "Should the US clean air act include CO2 emission control?: Examination by data envelopment analysis," Energy Policy, Elsevier, vol. 38(10), pages 5902-5911, October.
    6. Dong-hyun Oh, 2010. "A global Malmquist-Luenberger productivity index," Journal of Productivity Analysis, Springer, vol. 34(3), pages 183-197, December.
    7. Rolf Färe & Shawna Grosskopf & Carl A Pasurka, Jr., 2001. "Accounting for Air Pollution Emissions in Measures of State Manufacturing Productivity Growth," Journal of Regional Science, Wiley Blackwell, vol. 41(3), pages 381-409.
    8. Kim, Sei-wan & Lee, Kihoon & Nam, Kiseok, 2010. "The relationship between CO2 emissions and economic growth: The case of Korea with nonlinear evidence," Energy Policy, Elsevier, vol. 38(10), pages 5938-5946, October.
    9. Oh, Dong-hyun & Heshmati, Almas, 2010. "A sequential Malmquist-Luenberger productivity index: Environmentally sensitive productivity growth considering the progressive nature of technology," Energy Economics, Elsevier, vol. 32(6), pages 1345-1355, November.
    10. Lisann Krautzberger & Heike Wetzel, 2012. "Transport and CO 2 : Productivity Growth and Carbon Dioxide Emissions in the European Commercial Transport Industry," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 53(3), pages 435-454, November.
    11. Pasurka, Carl Jr., 2006. "Decomposing electric power plant emissions within a joint production framework," Energy Economics, Elsevier, vol. 28(1), pages 26-43, January.
    12. Zhou, P. & Ang, B.W. & Han, J.Y., 2010. "Total factor carbon emission performance: A Malmquist index analysis," Energy Economics, Elsevier, vol. 32(1), pages 194-201, January.
    13. Fare, Rolf & Shawna Grosskopf & Mary Norris & Zhongyang Zhang, 1994. "Productivity Growth, Technical Progress, and Efficiency Change in Industrialized Countries," American Economic Review, American Economic Association, vol. 84(1), pages 66-83, March.
    14. Tulkens, Henry & Vanden Eeckaut, Philippe, 1995. "Non-parametric efficiency, progress and regress measures for panel data: Methodological aspects," European Journal of Operational Research, Elsevier, vol. 80(3), pages 474-499, February.
    15. Chiu, Ching-Ren & Liou, Je-Liang & Wu, Pei-Ing & Fang, Chen-Ling, 2012. "Decomposition of the environmental inefficiency of the meta-frontier with undesirable output," Energy Economics, Elsevier, vol. 34(5), pages 1392-1399.
    16. Kumar, Surender, 2006. "Environmentally sensitive productivity growth: A global analysis using Malmquist-Luenberger index," Ecological Economics, Elsevier, vol. 56(2), pages 280-293, February.
    17. Fare, Rolf & Grosskopf, Shawna & Noh, Dong-Woon & Weber, William, 2005. "Characteristics of a polluting technology: theory and practice," Journal of Econometrics, Elsevier, vol. 126(2), pages 469-492, June.
    18. Nakano, Makiko & Managi, Shunsuke, 2008. "Regulatory reforms and productivity: An empirical analysis of the Japanese electricity industry," Energy Policy, Elsevier, vol. 36(1), pages 201-209, January.
    19. Färe, Rolf & Grosskopf, Shawna & Pasurka, Carl A., 2007. "Environmental production functions and environmental directional distance functions," Energy, Elsevier, vol. 32(7), pages 1055-1066.
    20. Oh, Dong-hyun, 2010. "A metafrontier approach for measuring an environmentally sensitive productivity growth index," Energy Economics, Elsevier, vol. 32(1), pages 146-157, January.
    21. George Battese & D. Rao & Christopher O'Donnell, 2004. "A Metafrontier Production Function for Estimation of Technical Efficiencies and Technology Gaps for Firms Operating Under Different Technologies," Journal of Productivity Analysis, Springer, vol. 21(1), pages 91-103, January.
    22. George E. Battese & D. S. Prasada Rao, 2002. "Technology Gap, Efficiency, and a Stochastic Metafrontier Function," International Journal of Business and Economics, College of Business and College of Finance, Feng Chia University, Taichung, Taiwan, vol. 1(2), pages 87-93, August.
    23. Oh, Wankeun & Lee, Kihoon, 2004. "Energy consumption and economic growth in Korea: testing the causality relation," Journal of Policy Modeling, Elsevier, vol. 26(8-9), pages 973-981, December.
    24. Lozano, Sebastián & Gutiérrez, Ester, 2008. "Non-parametric frontier approach to modelling the relationships among population, GDP, energy consumption and CO2 emissions," Ecological Economics, Elsevier, vol. 66(4), pages 687-699, July.
    25. Oh, Wankeun & Lee, Kihoon, 2004. "Causal relationship between energy consumption and GDP revisited: the case of Korea 1970-1999," Energy Economics, Elsevier, vol. 26(1), pages 51-59, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:gam:jsusta:v:9:y:2017:i:6:p:932-:d:100349 is not listed on IDEAS
    2. repec:spr:nathaz:v:88:y:2017:i:3:d:10.1007_s11069-017-2932-1 is not listed on IDEAS
    3. Li, Ke & Lin, Boqiang, 2015. "Metafroniter energy efficiency with CO2 emissions and its convergence analysis for China," Energy Economics, Elsevier, vol. 48(C), pages 230-241.
    4. Qing Yang & Xingzi Wan & Huimin Ma, 2015. "Assessing Green Development Efficiency of Municipalities and Provinces in China Integrating Models of Super-Efficiency DEA and Malmquist Index," Sustainability, MDPI, Open Access Journal, vol. 7(4), pages 1-19, April.
    5. repec:gam:jsusta:v:9:y:2017:i:8:p:1384-:d:107136 is not listed on IDEAS

    More about this item

    Keywords

    Malmquist-Luenberger productivity (ML) index; DEA; undesirable output; CO2 emission; Metafrontier Malmquist-Luenberger productivity (MML) index; productivity change;

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp7235. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Fallak). General contact details of provider: http://www.iza.org .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.