Examining eco-efficiency convergence of European Industries.The existence of technological spillovers within a metafrontier framework

Kounetas, Konstantinos and Stergiou, Eirini (2019): Examining eco-efficiency convergence of European Industries.The existence of technological spillovers within a metafrontier framework.

Abstract

European policies regarding global warming have been outspread the last few decades with many initiatives for industrial production process. In this paper we model eco-efficiency performance under a meta-frontier framework for 14 industries from the manufacturing sector from 27 European countries over the 1995-2011 period. The utilization of NOx, SOx, CO2, CH4, N2O, CO, NMVOC and NH3 as undesirable outputs and GVA as the desirable represent the impact of of economic activities on the environment. In the first stage, we estimate eco-efficiency using the conventional Directional Distance Function (DDF) as well as the non-radial DDF approach. In the second stage of analysis, we investigate the existence of conditional and unconditional convergence according to several methodologies. Our eco-efficiency estimates provide a distinct behavior for energy intensive European industries. Moreover, a decline occurs for the majority of them. In addition, our results using distributional dynamics approach and the recent approach of Philips and Sul (2007) supports the non-convergence hypothesis and the creation of distinct clubs. Finally, the establishment of a catch up index indicate an increase in a speed of convergence.

• Item Type: MPRA Paper
• Language: English
• Keywords: Eco-efficiency,Non-parametric frontier analysis, Convergence, Technological heterogeneity,European Industries.
• Subjects: C - Mathematical and Quantitative Methods > C2 - Single Equation Models ; Single Variables > C22 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes; C - Mathematical and Quantitative Methods > C4 - Econometric and Statistical Methods: Special Topics > C44 - Operations Research ; Statistical Decision Theory; D - Microeconomics > D2 - Production and Organizations; D - Microeconomics > D2 - Production and Organizations > D24 - Production ; Cost ; Capital ; Capital, Total Factor, and Multifactor Productivity ; Capacity; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q40 - General; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q52 - Pollution Control Adoption and Costs ; Distributional Effects ; Employment Effects

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