Eco-innovation in Transportation Industry a Double-Frontier Analysis Approach

Eco-innovation refers to the development of products and processes in the service of sustainable development, which uses scientific experiences, both directly and indirectly, to improve the environment. Eco-innovation is crucially important in the consumption of resources and pollution of the environment. Furthermore, it is one of the most fundamental factors in determining the success or failure of energy-consumption plans and protecting the environment. Thus, Eco-innovation is the cornerstone of sustainable development. The transportation industry is one of the main sources of environmental pollution. Analyzing efficiency of this industry helps people and societies to have a better understanding of its performance and develop better management strategies. The necessity of sustainable development in the transportation industry requires efficiency analysis over time. The Malmquist Productivity Index (MPI) is one of the common approaches to assess performance over the course of consecutive periods. This paper used a double-frontier analysis approach to propose a modern analysis to measure efficiency. In the proposed approach, the common set of weights for MPI is yielded by taking into account the undesirable outputs in the efficiency analysis. This paper demonstrated the application of the proposed models by investigating freight transport in Iran. The proposed models for the MPI analysis to decompose overall efficiency into efficiency change and technical change enable the decision-makers to meticulously trace the Eco-innovation and environmental efficiency in this industry.