A non-parametric decomposition of the environmental performance-income relationship: evidence from a non-linear model

Béchir Ben Lahouel (), Younes Ben Zaied (), Guo-liang Yang (), Maria-Giuseppina Bruna () and Yaoyao Song ()
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Béchir Ben Lahouel: IPAG Business School Paris, IPAG Chair “Towards an Inclusive Company”
Younes Ben Zaied: EDC Paris Business School
Guo-liang Yang: Institutes of Science and Development – Chinese Academy of Sciences
Maria-Giuseppina Bruna: IPAG Business School Paris, IPAG Chair “Towards an Inclusive Company”
Yaoyao Song: School of Economics, Capital University of Economics and Business

Annals of Operations Research, 2022, vol. 313, issue 1, No 20, 525-558

Abstract: Abstract This paper attempts to examine whether the environmental Kuznets curve (EKC) hypothesis is supported in MENA countries. We use, a novel RAM (range-adjusted measure)-based global Malmquist-Luenberger productivity index, accounting for slacks of inputs as well as desirable and undesirable outputs, to evaluate and decompose “green” productivity growth rates into technical change, pure efficiency change and scale change. By employing a panel smooth transition regression (PSTR) model, we investigate the income elasticity of environmental performance with respect to the decomposition factors. Our empirical results show that there are double thresholds when technical change and scale change are taken as transition variables, then leading to an inverted N-shaped curve between income and environmental performance. A single threshold is found when pure efficiency change is considered as a transition variable, yielding to an inverted U-shaped curve. Thus, our research does not find support for the EKC hypothesis.

Keywords: Data Envelopment Analysis (DEA); Range-based global Malmquist-Luenberger; Decomposition analysis; Green productivity; Environmental Kuznets curve; Panel smooth transition regression (search for similar items in EconPapers)
Date: 2022
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DOI: 10.1007/s10479-021-04019-x

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