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Sustainability performance of countries matters: A non-parametric index

Tajbakhsh, Alireza, Shamsi, Azam
Journal of cleaner production 2019 v.224 pp. 506-522
case studies, consumer attitudes, decision making, laws and regulations, models, stakeholders
Tracking consumers' expectation, researchers' concentration, practitioners' competition, and governments’ legislation, we observe increasing interests in incorporating sustainability initiatives into managerial decision-making. Sustainability development centers on how to achieve balance among economic, environmental, and social objectives of involved stakeholders in the process of value creation. This paper focuses on the macro-level performance measurement of countries through a sustainability-conscious lens. Our methodological objective is to develop a non-parametric frontier model in the presence of undesirable integer-valued indicators which constructs a nationwide sustainability composite index. Particularly, a super-efficiency formulation is investigated which enables us to differentiate between equally efficient entities. From an empirical perspective, we apply the proposed model to a case study assessing the sustainability productivity of 133 countries. Our computational results demonstrate that conventional metrics commonly used globally to reflect the sustainability performance of governments may mislead decision makers. We, however, design a more comprehensive platform to benchmark the country-level productivity against all triple aspect of sustainability development. Accordingly, the proposed index permits valid inference by accounting for environmental measures and social aspects.