Efficiency and productivity in presence of undesirable outputs

The present thesis is composed of a short introduction aimed at introducing the topic and reviewing the literature and then three empirical articles. In the first paper the eco-efficiency levels of a group of Italian firms operating in 5 industrial sectors are computed using the directional distance function (DDF) framework. Results are analysed in a second stage where the determinants of environmental performances and the regulatory impact are investigated applying a robust econometric technique. Estimates underline that the sector-specific effect on eco-efficiency and on regulatory opportunity costs will disappear when individual characteristics of firms are considered, finally a major difficulty in dealing with environmental constraints emerges for small and medium firms. The second application deals with the scientific production of CNR’s research institutes: they produce a portfolio of products characterised by different scientific profile. The hypothesis is that there are 2 category of scientific outputs: researchers and institutes try to maximize only one of them, but the other cannot be reduced or eliminated. Obtained DDF estimates allow to verify different hypothesis: from the consistency and novelty of results in respect to the standard approach, to the TFP growth trends and concluding with quantification, in term of unpublished scientific papers, of the fund cutting occurred after the 2003 reform. Finally is proposed an efficiency analysis of the chemical industry in Italy and Germany, a mature sector where testing for the validity of Porter’s hypothesis could be particularly interested. Estimations reveal an higher eco-efficiency level for Italian firms also if they are more pollutant in absolute term. TFP growth, that takes into account reduction in emission levels, reveal a more favourable trend for German firms which at the end of period reach an eco-efficiency level similar to their counterparts. Finally the formal test for the Porter’s hypothesis lead to a rejection, revealing the absence of a positive relationship between initial regulatory costs and observed TFP growth rates.