TY - JOUR
T1 - Environmental efficiency and labour productivity: Trade-off or joint dynamics? A theoretical investigation and empirical evidence from Italy using NAMEA
AU - Mazzanti, Massimiliano
AU - Zoboli, Roberto
PY - 2009
Y1 - 2009
N2 - In this paper we test an adapted EKC hypothesis to verify the relationship between
‘environmental efficiency’ (namely emissions per unit of value added) and labour
productivity (value added per employee). We exploit NAMEA data on Italy for 29 sector
branches and 6 categories of air emissions for the period 1991–2001. We employ data on
capital stock and trade openness to test the robustness of our results.
On the basis of the theoretical and empirical analyses focusing on innovation, firm
performances and environmental externalities, we would expect a positive correlation
between environmental efficiency and labour productivity—a negative correlation between
the emissions intensity of value added and labour productivity — which departs from the
conventional mainstream view. The hypothesis tested is a critical one within the
longstanding debate on the potential trade-off or complementarity between
environmental preservation and economic performance, which is strictly associated with
the role of technological innovation. We find that for most air emission categories there is a
positive relationship between labour productivity and environmental efficiency. Labour
productivity dynamics, then, seem to be complementary to a decreasing emissions intensity
in the production process. Taking a disaggregate sector perspective, we show that the
macro-aggregate evidence is driven by sector dynamics in a non-homogenous way across
pollutants. Services tend always to show a ‘complementary’ relationship, while industry
seems to be associated with inverted U-shape dynamics for greenhouse gases and nitrogen
oxides. This is in line with our expectations. In any case, EKC shapes appear to drive such
productivity links towards complementarity. The extent to which this evidence derives
from endogenous market forces, industrial and structural change, and policy effects is
discussed by taking an evolutionary perspective to innovation and by referring to impure
public goods arguments.
AB - In this paper we test an adapted EKC hypothesis to verify the relationship between
‘environmental efficiency’ (namely emissions per unit of value added) and labour
productivity (value added per employee). We exploit NAMEA data on Italy for 29 sector
branches and 6 categories of air emissions for the period 1991–2001. We employ data on
capital stock and trade openness to test the robustness of our results.
On the basis of the theoretical and empirical analyses focusing on innovation, firm
performances and environmental externalities, we would expect a positive correlation
between environmental efficiency and labour productivity—a negative correlation between
the emissions intensity of value added and labour productivity — which departs from the
conventional mainstream view. The hypothesis tested is a critical one within the
longstanding debate on the potential trade-off or complementarity between
environmental preservation and economic performance, which is strictly associated with
the role of technological innovation. We find that for most air emission categories there is a
positive relationship between labour productivity and environmental efficiency. Labour
productivity dynamics, then, seem to be complementary to a decreasing emissions intensity
in the production process. Taking a disaggregate sector perspective, we show that the
macro-aggregate evidence is driven by sector dynamics in a non-homogenous way across
pollutants. Services tend always to show a ‘complementary’ relationship, while industry
seems to be associated with inverted U-shape dynamics for greenhouse gases and nitrogen
oxides. This is in line with our expectations. In any case, EKC shapes appear to drive such
productivity links towards complementarity. The extent to which this evidence derives
from endogenous market forces, industrial and structural change, and policy effects is
discussed by taking an evolutionary perspective to innovation and by referring to impure
public goods arguments.
KW - Environmental efficiency
KW - Labour pruductivity
KW - NAMEA
KW - Environmental efficiency
KW - Labour pruductivity
KW - NAMEA
UR - http://hdl.handle.net/10807/116012
U2 - 10.1016/j.ecolecon.2008.08.009
DO - 10.1016/j.ecolecon.2008.08.009
M3 - Article
SN - 0921-8009
VL - 68
SP - 1182
EP - 1194
JO - Ecological Economics
JF - Ecological Economics
ER -