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The impact of market structure on environmental efficiency in the United States: A quantile approach
Author(s) -
Halkos George E.,
Polemis Michael L.
Publication year - 2019
Publication title -
business strategy and the environment
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.123
H-Index - 105
eISSN - 1099-0836
pISSN - 0964-4733
DOI - 10.1002/bse.2244
Subject(s) - quantile , econometrics , robustness (evolution) , quantile regression , data envelopment analysis , economics , production function , market concentration , financial crisis , cumulative distribution function , distribution (mathematics) , conditional probability distribution , market structure , production (economics) , statistics , mathematics , microeconomics , probability density function , macroeconomics , mathematical analysis , biochemistry , chemistry , gene
This paper investigates the relationship between efficiency and market structure for a sample of industrial facilities dispersed among the U.S. states. In order to measure the relevant efficiency scores, we use a data envelopment analysis allowing for the inclusion of desirable and undesirable (toxic chemical releases) outputs in the production function. In the next stage, we utilize the bootstrapped quantile regression methodology to uncover possible nonlinear relationships between efficiency and competition at the mean and at various quantiles before and after the global financial crisis (2002 and 2012). In this way, we impose no functional form constraints on parameter values over the conditional distribution of the dependent variable (efficiency). At the same time, we estimate at which part of its cumulative distribution function the efficiency is located and draw substantial conclusions about the range of policy measures obtained. The empirical findings indicate that the relationship between efficiency and market concentration did change in the aftermath of the global financial crisis. The empirical results survived robustness checks under the inclusion of an alternative market concentration indicator (CR8).