title: Environmental efficiency of energy, materials, and emissions.
abstract: 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 potential sellers or production reducers in terms of undesirable 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.
authors.affiliation: Interfaculty Initiative in the Social Sciences, Kobe University, Japan.
authors.forename: Michiyuki
authors.initials: M
authors.lastname: Yagi
authors.affiliation: Graduate School of Fisheries Science and Environmental Studies, Nagasaki University, Japan.
authors.forename: Hidemichi
authors.initials: H
authors.lastname: Fujii
authors.affiliation: School of Economics and Finance, QUT Business School, Queensland University of Technology, Australia.
authors.forename: Vincent
authors.initials: V
authors.lastname: Hoang
authors.affiliation: Department of Urban and Environmental Engineering, School of Engineering, Kyushu University, Japan; Research Institute of Economy, Trade and Industry, 1-3-1, Kasumigaseki, Chiyoda-ku, Tokyo, 100-8901, Japan; School of Economics and Finance, QUT Business School, Queensland University of Technology, Australia. Electronic address: managi@doc.kyushu-u.ac.jp.
authors.forename: Shunsuke
authors.initials: S
authors.lastname: Managi
mesh_terms: D003247:Conservation of Natural Resources / Q000191:economics / Q000706:statistics & numerical data; D017598:Efficiency, Organizational / Q000592:standards / Q000706:statistics & numerical data / Q000639:trends; D058735:Environmental Policy / Q000191:economics; D007221:Industry / Q000191:economics / Q000592:standards* / Q000706:statistics & numerical data; D038622:Internationality; D008962:Models, Theoretical; D018709:Statistics, Nonparametric
keywords: Data envelopment analysis; Environmental efficiency; Free disposal hull; Linear programming; Shadow price