Does Environmental Protection Lead to Slower Productivity Growth in the Chemical Industry?

• Published in: Environmental & resource economics Vol. 28; no. 3; pp. 301 - 324
• Main Authors: Domazlicky, Bruce R, Weber, William
• Format: Journal Article
• Language: English
• Published: Dordrecht European Association of Environmental and Resource Economists 01-07-2004; Springer Nature B.V
• Series: Environmental & Resource Economics
• Subjects: Bias; Capital stock; Chemical industry; Chemical spills; directional distance function; Efficiency; Electric power; Electric utilities; Environment; Environmental economics; Environmental protection; Environmental regulations; Expenditures; Industrial plant emissions; Manufacturing; Operating costs; Organic chemicals; Pollution; Productivity; Productivity growth; Shadow prices; Sulfur
• ISSN: 0924-6460; 1573-1502
• DOI: 10.1023/B:EARE.0000031056.93333.3a

Efficiency and productivity growth is measured at the three-digit SIC level for six chemical industries for 1988–1993. The directional distance function is used to measure the lost chemical manufacturing output and the overproduction of toxic chemical releases. Total factor productivity growth is decomposed into a product of efficiency change and technical change. Accounting for toxic chemical releases, productivity grows at anannual rate of between 2.4% and 6.9%. We find no evidence that environmental protection measures reduce productivity growth. Copyright Kluwer Academic Publishers 2004