Technical Efficiency and Eco-Efficiency in the Manufacturing Industry: A Non-Parametric Frontier Approach
نویسندگان
چکیده
Poor environmental performance of the manufacturing activities is said to be attributed to the pollutants produced and emitted during the manufacturing process. These pollutants are regarded as undesirable output and cannot be ignored when measuring the efficiency of manufacturing activities. By applying Data Envelopment Analysis (DEA) and Directional Distance Function (DDF) approaches, this study evaluates the technical efficiency and eco-efficiency of the manufacturing industries in Malaysia at the state level, for the period 2001 to 2010. The evaluation is carried out through a joint production framework involving desirable and undesirable outputs. Looking at the overall picture of eco-efficiency, similar results to the technical efficiency were obtained, in which the eco-efficiency scores for the states under the Free Industrial Zone (FIZ) category were slightly higher than the Non-Free Industrial Zone (N-FIZ) category. This high eco-efficiency for the manufacturing sector demonstrates that environmental performance in Malaysia is not adversely affected with respect to industrial development in that Malaysia can be categorized as an eco-efficient country while simultaneously enabling firms to earn a profit.
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