engleski

Environmentally adjusted productivity change: comparing Croatia with other European Union member states

Croatia has lagged in terms of productivity behind most of its European peers. A continuous care about it is a necessary precondition for a country to develop its competitive advantages and growth in economic terms. However, productivity should be simultaneously environmentally sensitive to have a favorable effect on the environment and lead to sustainable growth and development. This paper, which calculates first the environmentally adjusted efficiency scores by using the data envelopment analysis, revealed the downward trend in efficiency in the European Union and Croatia in particular over the period 2000-2018. The paper then estimates the environmentally adjusted productivity scores for each EU Member States by applying the Malmquist index approach across the same period. The analyses show that environmentally adjusted productivity mildly improved in the EU over the period considered. This also holds for Croatia although the improvement took place at a slower peace. Given that the productivity is a product of two effects, the technological effect and catching-up effect, the analysis shows that the improvement in the environmentally adjusted productivity is provoked by innovation activities. Compared to other EU Member States, Croatia has positioned itself in the group of countries with the lowest environmentally adjusted efficiency and productivity.

productivity ; environmental adjustment ; Malmquist productivity index ; technological effect ; Croatia

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