Aggregate green productivity growth in OECD’s countries

Zhiyang Shen, Jean-Philippe Boussemart and Hervé Leleu

No 2016-EQM-03, Working Papers from IESEG School of Management

Abstract: Most of previous research about Total Factor Productivity (TFP) at the macro level only emphasizes technical effect and technological progress at the country level, but it ignores structural effect for a group of countries at the aggregate level. This paper attempts to measure the green productivity evolution incorporating carbon dioxide emissions based on the Luenberger TFP indicator for a group of 30 OECD countries over the period of 1971-2011. We propose a novel decomposition for green productivity growth at the aggregate level which separates TFP changes into three components: technological progress, technical efficiency change, and structural efficiency change. The structural effect captures the heterogeneity in the combination of input and output mixes among countries that can impact TFP growth at a more aggregate level. In the literature, this effect has not been quantified for a group of nations such as the OECD countries. Our results indicate that the traditional TFP index underestimates green growth which is motivated by the effective and efficient environmental policies of the OECD. The green productivity growth is mainly driven by technology progress which has become a dominant force in the 21st century.

Keywords: Undesirable Output; Carbon Dioxide Emissions; Total Factor Productivity; Weak Disposability (search for similar items in EconPapers)
JEL-codes: D24 O44 O47 Q50 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2015-12
New Economics Papers: this item is included in nep-eff, nep-ene, nep-env and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Aggregate green productivity growth in OECD’s countries (2017)
Working Paper: Aggregate green productivity growth in OECD’s countries (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:ies:wpaper:e201603

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