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

George E. Halkos, Shunsuke Managi

Research output: Contribution to journalArticlepeer-review

16 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)753-775
Number of pages23
JournalEnvironmental and Resource Economics
Volume68
Issue number3
DOIs
Publication statusPublished - Nov 1 2017

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics
  • Management, Monitoring, Policy and Law

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