FEEM working papers "Note di lavoro"
2020.05
Date: 1/6/2020

The Inclusive and Sustainable Industrial Development Index: A Data Envelopment Analysis Approach


Authors:
Charles Fang Chin Cheng (UNIDO - Department of Policy Research and Statistics); Nicola Cantore (UNIDO - Department of Policy Research and Statistics)
JEL n.: Q01, Q54
Keywords: Slack-based model (SBM), Inclusive and Sustainable Industrial Development (ISID), data envelopment analysis (DEA), United Nations Sustainable Development Goals (UN SDGs)

Abstract

Inclusive and Sustainable Industrial Development (ISID) calls for the full engagement and commitment of policymakers in industrializing countries to minimize the environmental footprint and enhance social inclusion. This study investigates the progress of 118 countries towards ISID (2005-2015) through an input-oriented CCR (Charnes, Cooper and Rhodes) slack-based (data envelopment analysis) DEA model. The efficiency analyses have been carried out using two approaches: i) the ISID approach represents countries’ ambition to promote industrialization and to sustain economic growth by reducing the negative environmental and social effects that become manifest in the economy; ii) the ISIDsdg9 approach considers the same aspects of ISID but only focusses on indicators related to the industrial sector. We develop an analytical tool to measure ISID using these two different approaches. This study finds that Denmark, Sweden and Switzerland top the ranking when applying the ISID approach, and that Czechia and Switzerland rank highest when we apply the ISIDsdg9 approach. We could not detect any signs of catching up between developed and developing countries in terms of progress towards ISID and ISIDsdg9 between 2005 and 2013.

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Suggested citation: Cheng, C.F.C., N. Cantore, (2020), 'The Inclusive and Sustainable Development Index: a Data Envelopment Analysis Approach', Nota di Lavoro 5.2020, Milano, Italy: Fondazione Eni Enrico Mattei.

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