Scandinavian Working Papers in Economics

CERE Working Papers,
CERE - the Center for Environmental and Resource Economics

No 2015:10: Environmental investment and firm performance: A network approach

Moriah Bostian (), Rolf Färe, Shawna Grosskopf and Tommy Lundgren ()
Additional contact information
Moriah Bostian: Lewis & Clark College, Postal: Department of Economics, Lewis & Clark College, Portland,, OR USA
Rolf Färe: Oregon State University, Postal: Department of Economics, Oregon State University, Corvallis,, OR USA
Shawna Grosskopf: Oregon State University and CERE, Postal: Department of Economics, Oregon State University, Corvallis,, OR USA
Tommy Lundgren: CERE, Postal: Centre for Environmental and Resource Economics, Umeå, University, Umeå, Sweden

Abstract: This study examines the role of investment in environmental production practices for both environmental performance and energy efficiency over time. We employ a network DEA approach that links successive production technologies through intertemporal investment decisions with a period by period estimation. This allows us to estimate energy efficiency and environmental performance separately, as well as productivity change and its associated decompositions into efficiency change and technology change. Incorporating a network model also allows us to account for both short-term environmental management practices and long-term environmental investments in each of our productivity measures. We apply this framework to a panel of detailed plant-level production data for Swedish manufacturing firms covering the years 2002 - 2008.

Keywords: Energy Efficiency; Environmental Performance; Network DEA; Malmquist Index; Investment

JEL-codes: D22; D24; M14

42 pages, September 19, 2015

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