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Reconciling the Porter hypothesis with the traditional paradigm about environmental regulation: a nonparametric approach

Jean-Pierre Huiban, Camilla Mastromarco, Antonio Musolesi () and Michel Simioni
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Camilla Mastromarco: University of Salento
Antonio Musolesi: University of Ferrara, and SEEDS
Michel Simioni: University of Montpellier

Journal of Productivity Analysis, 2018, vol. 50, issue 3, 85-100

Abstract: Abstract This paper estimates the impact of pollution abatement investments on the production technology of firms by pursuing two new directions. First, we take advantage of recent econometric developments in productivity, efficiency analysis and nonparametric kernel regression by adopting a conditional nonparametric frontier analysis. Second, we focus not only on the average effect but also search for potential nonlinearities. We provide new results suggesting that pollution abatement capital affects with a bell-shaped fashion technological catch-up (inefficiency distribution) and does not affect technological change (shifts in the frontier). These results have relevant implications both for modeling and for the purposes of advice on environmentally friendly policy.

Keywords: Conditional nonparametric frontier analysis; Full and partial order frontiers; Location-scale nonparametric regression; Infinite order cross-validated local polynomial regression; Separability condition; Porter hypothesis (search for similar items in EconPapers)
Date: 2018
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