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Environmental efficiency of energy, materials, and emissions

Author

Listed:
  • Yagi, Michiyuki
  • Hidemichi, Fujii
  • Hoang, Vincent
  • Managi, Shunsuke

Abstract

This study estimates the environmental efficiency of international listed firms in 10 worldwide sectors from 2007-2013 by applying an order-m method, a non-parametric approach based on free disposal hull with subsampling bootstrapping. Using a conventional output of gross profit and two conventional inputs of labor and capital, this study examines the order-m environmental efficiency accounting for the presence of each of 10 undesirable inputs/outputs and measures the shadow prices of each undesirable input and output. The results show that there is greater potential for the reduction of undesirable inputs rather than bad outputs. On average, total energy, electricity, or water usage has the potential to be reduced by 50%. The median shadow prices of undesirable inputs, however, are much higher than the surveyed representative market prices. Approximately 10% of the firms in the sample appear to be potential sellers or production reducers in terms of undesirable inputs/outputs, which implies that the price of each item at the current level has little impact on most of the firms. Moreover, this study shows that the environmental, social, and governance activities of a firm do not considerably affect environmental efficiency.

Suggested Citation

  • Yagi, Michiyuki & Hidemichi, Fujii & Hoang, Vincent & Managi, Shunsuke, 2015. "Environmental efficiency of energy, materials, and emissions," MPRA Paper 65358, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:65358
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    References listed on IDEAS

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    1. Hidemichi Fujii & Shunsuke Managi, 2016. "Trends in corporate environmental management studies and databases," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 18(2), pages 265-272, April.
    2. Boon Liat Lee & Clevo Wilson & Carl A. Pasurka & Hidemichi Fujii & Shunsuke Managi, 2017. "Sources of airline productivity from carbon emissions: an analysis of operational performance under good and bad outputs," Journal of Productivity Analysis, Springer, vol. 47(3), pages 223-246, June.
    3. Peihao Lai & Minzhe Du & Bing Wang & Ziyue Chen, 2016. "Assessment and Decomposition of Total Factor Energy Efficiency: An Evidence Based on Energy Shadow Price in China," Sustainability, MDPI, vol. 8(5), pages 1-23, April.
    4. Md. Wahid Murad & Md. Mahmudul Alam & Md. Mazharul Islam, 2018. "Dynamics of Japan’s industrial production and carbon emissions: causality, long-term trend and implications," Letters in Spatial and Resource Sciences, Springer, vol. 11(2), pages 127-139, July.
    5. Surender Kumar & Rakesh Kumar Jain, 2021. "Cost of CO2 emission mitigation and its decomposition: evidence from coal-fired thermal power sector in India," Empirical Economics, Springer, vol. 61(2), pages 693-717, August.
    6. Hui Li & Kangyin Dong & Renjin Sun & Jintao Yu & Jinhong Xu, 2017. "Sustainability Assessment of Refining Enterprises Using a DEA-Based Model," Sustainability, MDPI, vol. 9(4), pages 1-15, April.
    7. Linbo Zhang & Wenjing Xiang & Dongsheng Shi & Tian Liang & Xi Xiong & Shuyao Wu & Wentao Zhang & Duogui Yang, 2023. "Impact of Green Development Mechanism Innovation on Total-Factor Environmental Efficiency: A Quasi-Natural Experiment Based on National Pilot Cities," Sustainability, MDPI, vol. 15(2), pages 1-24, January.
    8. Rakesh Kumar Jain & Surender Kumar, 2018. "Shadow price of CO2 emissions in Indian thermal power sector," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 20(4), pages 879-902, October.
    9. Yagi, Michiyuki & Managi, Shunsuke, 2018. "Shadow price of patent stock as knowledge stock: Time and country heterogeneity," Economic Analysis and Policy, Elsevier, vol. 60(C), pages 43-61.
    10. Hidemichi Fujii & A. George Assaf & Shunsuke Managi & Roman Matousek, 2016. "Did the financial crisis affect environmental efficiency? evidence from the Japanese manufacturing sector," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 18(2), pages 159-168, April.
    11. Bampatsou, Christina & Halkos, George & Beneki, Christina, 2021. "Energy and material flow management to improve EU productivity," Economic Analysis and Policy, Elsevier, vol. 70(C), pages 83-93.
    12. Tamaki, Tetsuya & Nakamura, Hiroki & Fujii, Hidemichi & Managi, Shunsuke, 2019. "Efficiency and emissions from urban transport: Application to world city-level public transportation," Economic Analysis and Policy, Elsevier, vol. 61(C), pages 55-63.
    13. Shunsuke Managi & George Halkos, 2015. "Production analysis in environmental, resource, and infrastructure evaluation," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 4(1), pages 1-4, December.
    14. Satoshi Honma, 2015. "Does international trade improve environmental efficiency? An application of a super slacks-based measure of efficiency," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 4(1), pages 1-12, December.
    15. Ching-Ren Chiu & Ming-Chung Chang & Jin-Li Hu, 2022. "Energy intensity improvement and energy productivity changes: an analysis of BRICS and G7 countries," Journal of Productivity Analysis, Springer, vol. 57(3), pages 297-311, June.
    16. Zaiwu Gong & Xiaoqing Chen, 2017. "Analysis of Interval Data Envelopment Efficiency Model Considering Different Distribution Characteristics—Based on Environmental Performance Evaluation of the Manufacturing Industry," Sustainability, MDPI, vol. 9(12), pages 1-25, November.
    17. Iker Laskurain & Ander Ibarloza & Ainara Larrea & Erlantz Allur, 2017. "Contribution to Energy Management of the Main Standards for Environmental Management Systems: The Case of ISO 14001 and EMAS," Energies, MDPI, vol. 10(11), pages 1-21, November.

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    More about this item

    Keywords

    Data envelopment analysis; Environmental efficiency; Shadow price; Free disposal hull; Linear programming;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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