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Analyzing the Tradeoff between the Economic and Environmental Performance: the Case of Chinese Manufacturing Sector

Author

Listed:
  • Zhiyang SHEN

    (Beijing Institute of Technology, Beijing, China)

  • Michael VARDANYAN

    (IESEG School of Management, Lille, France)

  • Tomas BALEZENTIS

    (Lithuanian Institute of Agrarian Economics, Vilnius, Lithuania)

  • Jianlin WANG

    (Dongbei University of Finance and Economics, Dalian, China)

Abstract

The so-called by-production approach, introduced by Murty and Russell (2002) and Murty et al. (2012), has provided researchers with an improved methodology for approximating polluting production technologies. However, since the original by-production model does not impose any relationship between its economic and environmental sub-technologies, it is not capable of addressing the potential tradeoff between the economic and environmental performance. Although this link has been recently proposed in the extensions to the original by-production approach, the tradeoff framework remains ambiguous with respect to the weights to be assigned to the economic and environmental sub-objectives. This paper proposes a novel approach for estimating the green productivity growth in the Chinese manufacturing sector based on the scenario analysis simulating policy preferences. Our model allows us to measure the tradeoff between faster economic growth and better environmental protection, providing policy-makers with insights on how to steer the Chinese industry towards a more environmentally friendly development path in the future.

Suggested Citation

  • Zhiyang SHEN & Michael VARDANYAN & Tomas BALEZENTIS & Jianlin WANG, 2020. "Analyzing the Tradeoff between the Economic and Environmental Performance: the Case of Chinese Manufacturing Sector," Working Papers 2020-EQM-05, IESEG School of Management.
    • Handle: RePEc:ies:wpaper:e202005
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    Keywords

    : Tradeoff analysis; By-production technology; Carbon emissions; Green productivity; Chinese manufacturing.;
    All these keywords.

    JEL classification:

    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • O2 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy

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