engleski

Efficiency of regions: Environmental vs. economic point of view

Economic efficiency and possibilities of its improvement have become one of the leading imperatives of all world countries. On the other hand, there is an increase in energy consuming activities and waste, with overexploitation of most easily accessible energy resources and the global warming problem as predictable consequences. The relationship between these complex and apparently conflicting issues should therefore be carefully considered in terms of exploring the relationship between the economic and environmental performance of regions, which is the subject of this paper. The analysis is performed empirically, based on the nonparametric method of data envelopment analysis. To separately address economic and environmental efficiency of Croatian counties for the year 2016, two models that differ primarily in the selection of indicators are designed. The first one is based on predominantly economic indicators, while the second employs variables related exclusively to environmental factors. Each model results in a single efficiency measure for each county, also providing the possibility to identify and quantify inefficiency sources, rank their impact on efficiency itself and determine the directions of their improvement. The received relative efficiency results confirmed two hypotheses: first, that there are significant inter-county disparities in both economic and environmental performance, and second, that the correlation between the two efficiency measures is negligible. As a consequence of the unavailability of data on particular indicators used, the potential limitation of this research is the inability to dynamically consider efficiency. However, the results should assist economic and environmental policy makers to advance their decisions.

economic performance, environmental performance, Croatian counties, (in)efficiency, data envelopment analysis

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