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The role of environmental factors in growth accounting
Author(s) -
Jeon Byung M.,
Sickles Robin C.
Publication year - 2004
Publication title -
journal of applied econometrics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.878
H-Index - 99
eISSN - 1099-1255
pISSN - 0883-7252
DOI - 10.1002/jae.769
Subject(s) - productivity , economics , total factor productivity , production (economics) , econometrics , growth accounting , function (biology) , greenhouse gas , piecewise , frontier , technical change , industrial organization , economic geography , macroeconomics , mathematics , geography , ecology , mathematical analysis , archaeology , evolutionary biology , biology
This paper explores a relatively new methodology, the directional distance function method, to analyse productivity growth. The method allows us to explicitly evaluate the role that undesirable outputs of the economy, such as carbon dioxide and other greenhouse gases, have on the frontier production process which we specify as a piecewise linear and convex boundary function. We decompose productivity growth into efficiency change (catching up) and technology change (innovation). We test the statistical significance of the estimates using recently developed bootstrap methods. We also explore implications for growth of total factor productivity in the OECD and Asian economies. Copyright © 2004 John Wiley & Sons, Ltd.