Measuring the Effect of Economic Growth on Countries’ Environmental Efficiency: A Conditional Directional Distance Function Approach

George Halkos and Shunsuke Managi

Environmental & Resource Economics, 2017, vol. 68, issue 3, No 14, 753-775

Abstract: Abstract Using a recently developed probabilistic approach of a conditional directional distance function, we measure the effect of economic growth on countries’ environmental efficiency in carbon dioxide emissions for a sample of 99 countries over the period of 1980–2010. Our approach directly accounts for the exogenous factors influencing countries’ environmental production; therefore, we do not impose the separability condition on the estimated environmental efficiencies. When examining the entire sample as well as the sample of developed countries, our results reveal an inverted U-shaped relationship between countries’ GDP per capita and environmental efficiency. However, when examining the relationship for the sample of developing countries, the results reveal an N-shaped form. Moreover, our results show that countries ratifying the Kyoto Protocol tend to have higher efficiency scores, implying that their mitigation activity is less costly.

Keywords: Environmental efficiency; Carbon dioxide emissions; Conditional directional distance function; Kuznets curve; Nonparametric analysis (search for similar items in EconPapers)
JEL-codes: C61 O44 Q53 (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (21)

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DOI: 10.1007/s10640-016-0046-y

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