Measuring green productivity of country: A generlized metafrontier Malmquist productivity index approach

Abstract

This paper measures environmental productivity in 70 countries over the period 1981–2007. Differences in green (environmental) productivity growth across countries under distinct country specific production frontier are measured using directional distance function model, which incorporates desirable output (GDP) and undesirable output (CO2 emissions). The metafrontier which envelops the two country groups, developed countries and developing countries, are estimated using balanced panel data for the sample countries over the study period. A parametric method is used to compute technical efficiency change, technical change, and scale efficiency change, which aggregate to the generalized metafrontier Malmquist productivity index. The overall results indicated the two country groups operated under distinct stochastic production frontiers and therefore used different production technologies. It is found that developing countries achieved higher growth in their average environmental productivity relative to the metafrontier. Thus the results coincide with the convergence growth theory.