[pp.1-10]
Kermen BADMAEVA and Hirofumi ABE (Okayama University)
Abstract:
We examined traditional and environmentally sensitive total factor productivity (TFP) in 22 Japanese manufacturing industries for 1985, 1990, 1995, and 2000. The Luenberger productivity index (LPI) was used to examine the causes of productivity changes while accounting for carbon emissions. The index enables us to divide the change in productivity into efficiency and technical changes. Data envelopment analysis (DEA) is used to compute the directional distance function (DDF). The results showed that 14 of 22 Japanese manufacturing industries have a higher environmentally sensitive TFP during 1985-2000 compared to TFP when carbon emissions are not taken in account. The TFP growth that was found mainly results from technological innovation than efficiency improvement. We found that almost all energy-intensive and material-intensive industries were more efficient and showed higher LPI when bad outputs are considered than with LPI without undesirables.
Key Word:
CO2 emissions, data envelopment analysis, directional distance function, Luenberger productivity index