Sustainable Development and Performance Measurement: Global Productivity Decomposition

This paper analyzes productivity and efficiency by using inclusive wealth as a sustainability measurement. The study extends current measures of sustainability by capturing the efficient utilization of natural capital and other conventional inputs as input and carbon damage as undesirable output in a productivity measure for 140 countries from 1995 to 2010. To determine the contribution of each input/output to productivity and technical efficiency, we applied a weighted Russell directional distance and a Luenberger productivity measure. We found that GDP, natural capital and carbon damage are the main contributors to productivity change. Natural capital and carbon damage remain significant burdens for many countries' performance, especially for countries with resource-driven economies and extreme vulnerability to climatic shifts. This finding enhances our understanding of how particular countries can measure and manage their sustainability. Copyright (c) 2017 John Wiley & Sons, Ltd and ERP Environment