Productive inefficiency analysis and toxic chemical substances in US and Japanese manufacturing sectors

Fujii, Hidemichi & Managi, Shunsuke (2012) Productive inefficiency analysis and toxic chemical substances in US and Japanese manufacturing sectors. Asian Business & Management, 11(3), pp. 291-310.

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Abstract

Corporate social responsibility is imperative for manufacturing companies to achieve sustainable development. Under a strong environmental information disclosure system, polluting companies are disadvantaged in terms of market competitiveness, because they lack an environmentally friendly image. The objective of this study is to analyze productive inefficiency change in relation to toxic chemical substance emissions for the United States and Japan and their corresponding policies. We apply the weighted Russell directional distance model to measure companies productive inefficiency, which represents their production technology. The data encompass 330 US manufacturing firms observed from 1999 to 2007, and 466 Japanese manufacturing firms observed from 2001 to 2008. The article focuses on nine high-pollution industries (rubber and plastics; chemicals and allied products; paper and pulp; steel and non-ferrous metal; fabricated metal; industrial machinery; electrical products; transportation equipment; precision instruments) categorized into two industry groups: basic materials industries and processing and assembly industries. The results show that productive inefficiency decreased in all industrial sectors in the United States and Japan from 2001 to 2007. In particular, that of the electrical products industry decreased rapidly after 2002 for both countries, possibly because of the enforcement of strict environmental regulations for electrical products exported to European markets.

Impact and interest:

4 citations in Scopus
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4 citations in Web of Science®

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ID Code: 75368
Item Type: Review
Refereed: Yes
Keywords: Japan; manufacturing sector; productive inefficiency; toxic chemical substances; United States; weighted Russell directional distance model
DOI: 10.1057/abm.2012.8
ISSN: 1476-9328
Subjects: Australian and New Zealand Standard Research Classification > ECONOMICS (140000) > APPLIED ECONOMICS (140200)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Economics & Finance
Deposited On: 21 Aug 2014 00:53
Last Modified: 21 Aug 2014 00:54

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