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The effects of efficiency and TFP growth on pollution in Europe: a multistage spatial analysis

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journal contribution
posted on 27.05.2015, 09:05 by Morakinyo Adetutu, Anthony Glass, Karligash GlassKarligash Glass, Robin Sickles
It is common in efficiency studies which analyse the environment for pollution to form part of the production technology. Pollution therefore affects efficiency and the TFP growth decomposition. As an alternative approach we draw on theoretical studies from the environmental economics literature, which demonstrate that TFP affects environmental quality. Along these lines we adopt a two-stage empirical methodology. Firstly, we obtain two estimates of productive performance (efficiency and TFP growth) using a stochastic production frontier framework in Stage 1 for European countries (1995–2008), from which we omit emissions. Secondly, in Stage 2 these measures of productive performance are used as regressors in spatial models of per capita nitrogen and sulphur emissions for European countries. From our preferred Stage 2 spatial models we find that a country’s TFP growth must fall to reduce its per capita nitrogen and sulphur emissions. This is likely to be because nitrogen and sulphur emissions in the EU have been tightly regulated for a long period of time via air quality standards and consequently, substantial reductions in emissions from cleaner and more productive technology were achieved some time ago.



  • Business and Economics


  • Business

Published in

Journal of Productivity Analysis


ADETUTU, M. ... et al, 2014. The effects of efficiency and TFP growth on pollution in Europe: a multistage spatial analysis. Journal of Productivity Analysis, 43 (3), pp.307-326.


© Springer Science+Business Media New York


AM (Accepted Manuscript)

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This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/

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The final publication is available at Springer via http://dx.doi.org/10.1007/s11123-014-0426-7