Yagi et al. (2015, JEM)



Yagi, M., Fujii, H., Hoang, V., and Managi, S., “Environmental efficiency of energy, materials, and emissions,” Journal of Environmental Management, vol.161, pp.206-218, 2015. doi:10.1016/j.jenvman.2015.06.054





This study estimates the environmental efficiency of international listed firms in 10 worldwide sectors from 2007 to 2013 by applying an order-m method, a non-parametric approach based on free disposal hull with subsampling bootstrapping. Using a conventional output of gross profit and two conventional inputs of labor and capital, this study examines the order-m environmental efficiency accounting for the presence of each of 10 undesirable inputs/outputs and measures the shadow prices of each undesirable input and output. The results show that there is greater potential for the reduction of undesirable inputs rather than bad outputs. On average, total energy, electricity, or water usage has the potential to be reduced by 50%. The median shadow prices of undesirable inputs, however, are much higher than the surveyed representative market prices. Approximately 10% of the firms in the sample appear to be po- tential sellers or production reducers in terms ofundesirable inputs/outputs, which implies that the price of each item at the current level has little impact on most of the firms. Moreover, this study shows that the environmental, social, and governance activities of a firm do not considerably affect environmental efficiency


  • Aigner, D.J., Chu, S.F., 1968. On Estimating the Industry Production Function. American Economic Review, 58 (4), 826–839. http://www.jstor.org/stable/1815535/
  • Burtraw, D., Szambelan, S.J., 2009. U.S. Emissions Trading Markets for SO2 and NOx. Resources for the future Discussion Paper, No. 09-40, 1–42. doi:10.2139/ssrn.1490037
  • Cazals, C., Florens, J.P., Simar, L., 2002. Nonparametric frontier estimation: A robust approach. Journal of Econometrics, 106 (98), 1–25. doi:10.1016/S0304-4076(01)00080-X
  • Chambers, R.G., 2002. Exact nonradial input, output, and productivity measurement. Economic Theory 20, 751–765. doi:10.1007/s001990100231
  • Charnes, A., Cooper, W.W., 1962. Programming with linear fractional functionals. Naval Research Logistics Quarterly, 9 (3–4), 181–186. doi:10.1002/nav.3800090303
  • Cherchye, L., Kuosmanen, T., Post, T., 2001. FDH Directional Distance Functions: With an Application to European Commercial Banks. Journal of Productivity Analysis, 15 (3), 201–215. doi:10.1023/A:1011176325187
  • Daraio, C; Simar, L., 2007. Advance Robust and Nonparametric Methods in Efficiency Analysis. Springer: New York, USA. doi:10.1007978-0-387-35231-2
  • Deprins, D., Simar, L., Tulkens, H., 2006. Measuring Labor-Efficiency in Post Offices, in: Chander, P., Drèze, J., Lovell, C.K., Mintz, J. (Eds.), Public Goods, Environmental Externalities and Fiscal Competition, Part III. Springer US, 285–309. doi:10.1007978-0-387-25534-7_16
  • European Commission, 2012. Report from the commission to the European parliament and the council: the state of the European carbon market in 2012. http://ec.europa.eu/clima/policies/ets/reform/docs/com_2012_652_en.pdf [accessed: November 14, 2014]
  • Färe, R., Grosskopf, S., Noh, D.W., Weber, W., 2005. Characteristics of a polluting technology: Theory and practice. Journal of Econometrics, 126 (2), 469–492. doi:10.1016/j.jeconom.2004.05.010
  • Färe, R., Grosskopf, S., Tyteca, D., 1996. An activity analysis model of the environmental performance of firms—application to fossil-fuel-fired electric utilities. Ecological Economics, 18 (2), 161–175. doi:10.10160921-8009(96)00019-5
  • Fukuyama, H., Weber, W.L., 2008. Japanese banking inefficiency and shadow pricing. Mathematical and Computer Modelling, 48 (11–12), 1854–1867. doi:10.1016/j.mcm.2008.03.004
  • Kumbhakar, S.C., 1996. Efficiency measurement with multiple outputs and multiple inputs. Journal of Productivity Analysis, 7 (2–3), 225–255. doi:10.1007/BF00157043
  • Kuosmanen, T., Cherchye, L., Sipiläinen, T., 2006. The law of one price in data envelopment analysis: Restricting weight flexibility across firms. European Journal of Operational Research, 170 (3), 735–757. doi:10.1016/j.ejor.2004.07.063
  • International Energy Agency, 2013, Key world energy statistics 2013. http://www.iea.org/publications/freepublications/publication/KeyWorld2013.pdf [accessed: November 14, 2014]
  • Ishinabe, N., Fujii, H., Managi, S., 2013. The true cost of greenhouse gas emissions: Analysis of 1,000 global companies. PLoS ONE, 8 (11), e78703, 1–9. doi:10.1371/journal.pone.0078703
  • Lee, J.-D., Park, J.-B., Kim, T.-Y., 2002. Estimation of the shadow prices of pollutants with production/environment inefficiency taken into account: a nonparametric directional distance function approach. Journal of Environmental Management, 64 (4), 365–375. doi:10.1006/jema.2001.0480
  • Leleu, H., 2009. Mixing DEA and FDH models together. Journal of the Operational Research Society, 60 (12), 1730–1737. doi:10.1057/jors.2008.142 OECD, 2010. Pricing Water Resources and Water and Sanitation Services. doi:10.17879789264083608-en
  • Ray, S.C., Mukherjee, K., 2007. Efficiency in Managing the Environment and the Opportunity Cost of Pollution Abatement. Economics Working Papers 200709: University of Connecticut. http://digitalcommons.uconn.edu/econ_wpapers/200709/ [accessed: November 14, 2014]
  • Schmalensee, R., Stavins, R.N., 2013. The SO2 Allowance Trading System: The Ironic History of a Grand Policy Experiment. Journal of Economic Perspectives, 27 (1), 103–122. doi:10.1257/jep.27.1.103
  • Tauchmann, H., 2011. Partial frontier efficiency analysis for Stata. Discussion paper SFB 823: Technical University of Dortmund, No.252011. https://www.statistik.tu-dortmund.de/fileadmin/user_upload/SFB_823/discussion_papers/2011/DP_2511_SFB823_Tauchmann.pdf [accessed: November 14, 2014]
  • World Resources Institute and World Business Council for Sustainable Development, 2011, “Corporate Value Chain (Scope 3) Accounting and Reporting Standard.” http://www.ghgprotocol.org/standards/scope-3-standard [accessed: May 10, 2015]
TOP page (日本語)