Economic and Environmental Decomposition of Luenberger-Hicks-Moorsteen Total Factor Productivity Indicator: Empirical Analysis of Chinese Textile Firms With a Focus on Reporting Infeasibilities and Questioning Convexity
研究将负外部性纳入经济绩效测量，提出环境卢恩伯格-希克斯-穆尔斯汀全要素生产率指标及其分解，并检验凸性假设对生产率度量的影响，应用于2001-2010年中国纺织业数据。
We discuss an environmental Luenberger–Hicks–Moorsteen (LHM) total factor productivity (TFP) indicator and its decomposition that incorporates a negative externality into the measurement of economic performance. Special cases of a generalized environmental directional distance function are involved in the definition of this LHM indicator and its proposed decomposition. We also seek to test whether changes in the convexity assumption provoke differences in the TFP measures. We apply two specifications of the by-production nonparametric environmental technology to implement this LHM TFP. This LHM TFP indicator decomposes into three terms representing technical change, technical inefficiency change, and scale inefficiency change. The changes in the environmental TFP for China's textile industry is then estimated for the period from 2001 to 2010. We report infeasibilities and we show the differences of the proposed framework for the decomposition of the LHM indicator depending on the convexity assumption. The results suggest there has been an increase in the TFP of China's textile industry: the amount depends on the convexity or not of the technology. The environmental performance is poorer than the economic one. Moreover, contradictions between convex and nonconvex LHM indicators for individual observations appear for a substantial part of the sample.