1 Introduction
Numerous examples of joint production and joint costs are reported in the early literature on husbandry, estate management and farming, in the writings of the mercantilists and physiocrats. This is hardly surprising since the then most important sector of the economy and the major object of the analysis, i.e. agriculture, appears to be characterised by universal joint production. However, it was not until Adam Smith’s Wealth that an attempt was made to transcend the purely descriptive treatment of the problem and to begin to deal with it in analytical terms. Therefore, Smith’s contribution is the starting point of our historical inquiry.
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Are there any literature surveys which include the respective term in their topics? How many respective scientific articles have been published in the past decades? What is their development over time? How often are they cited? Which journals contain most of the relevant literature? Which articles are cited most frequently, and which authors are most prevalent? What kind of questions and issues are dealt with by these articles?
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How were the subjects and their corresponding terms discussed over time, and what kind of relations are there between them and the journals in which they were published, the authors who wrote about them, as well as the special questions and issues dealt with? Are important phenomena of joint production still being neglected by general and by business economic theory in the recent literature? How can this be changed?
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Bearing the historical background of the term joint production in mind, which conclusions can be drawn from the results of this study for important future research paths, especially regarding business and general economics?
2 Methodology of the literature study
3 Results of the literature search
3.1 Relevant reviews
Joint production (JP) (5 reviews) | Byproducts (BP) (19 reviews) | Undesirable outputs (UO) (8 reviews) | |
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Until 2014 | |||
Desrochers (2002a): 49 rodehutscord et al. (2002):28 murty and naidu (2012): 412 | Chiu et al. (2011): 39 | ||
2015 – 2020 | |||
butterfield et al. (2016): 18 garcia et al. (2018): 6 baskent (2018): 6 Tahvanainen et al. (2018): 5 Ovando and Brouwer (2019): 14 | Walls and Paquin (2015): 82 culin and mustac (2015): 19 Dakpo et al. (2016): 133 lanfranchi et al. (2016): 20 Jain (2017): 0 dahiya and Nigam (2018): 3 cravotto et al. (2018): 23 Fidelis et al. (2019): 34 | Dakpo et al. (2016): 133 Forsund (2018): 21 Halkos and Petrou (2019): 50 Wang et al. (2019): 27 Ma et al. (2019): 13 Otani and Yamada (2019): 2 Akbari et al. (2020): 7 |
Joint production (JP) (5 reviews) | Byproducts (BP) (19 reviews) | Undesirable outputs (UO) (8 reviews) |
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forestry: 4 Economics: 2 | food science technology: 4 Management: 3 energy fuels: 3 Economics: 2 biochemistry molecular biology: 2 chemistry multidisciplinary: 2 Business: 1 OR/MS: 1 | Management: 4 OR/MS: 4 Economics: 3 Business: 1 |
3.2 Characteristic features of the relevant literature
3.2.1 Numerical development of literature and citations
3.2.2 Distribution within disciplines and journals
Joint production (JP) (254 publications) | Byproducts (BP) (294 publications) | Undesirable outputs (UO) (674 publications) |
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Economics: 84% environmental studies: 19% OR/MS: 14% math. methods in social sciences: 11% Business: 9% environmental sciences: 9% Management: 9% agricultural economics policy: 9% Business Finance: 5% ecology: 5% energy fuels: 5% forestry: 4% industrial engineering: 4% manufacturing engineering: 4% mathematics (interdiscipl. applications): 4% transportation: 3% probability statistics: 3% | Economics: 59% OR/MS: 25% environmental studies: 24% Management: 22% environmental sciences: 13% Business: 12% energy fuels: 10% agricultural economics policy: 9% Iindustrial engineering: 7% manufacturing engineering: 5% math. methods in social sciences: 4% forestry: 3% ecology: 3% Business Finance: 2% | Economics: 59% OR/MS: 35% Management: 25% environmental studies: 18% environmental sciences: 13% energy fuels: 10% Business: 8% Math. methods in social sciences: 7% agricultural economics policy: 5% transportation: 4% ecology: 4% Business Finance: 3% mathematics (interdiscipl. applications): 3% transportation science technology: 3% industrial engineering: 3% |
Joint production (JP) (254 publications) | Byproducts (BP) (294 publications) | Undesirable outputs (UO) (674 publications) |
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Ecological Economics: 4.7% EJOR: 3.9% Americ J Agricultural Econ: 3.5% Forest Policy and Econ: 3.5% J Productivity Anal: 3.5% Energy Econ: 3.2% J Political Econ: 3.2% Econometrica: 2.4% Energy Policy: 2.4% Environ Resource Econ: 2.4% J Banking Finance: 2.4% Resource and Energy Econ: 2.4% | Energy Policy: 7.5% EJOR: 5.1% Ecological Economics: 3.1% Environmental and Resource Economics: 2.7% Forest Policy and Economics: 2.7% Int J Prod Econ: 2.4% Energy Economics: 2.0% Quality Access to Success: 2.0% Resource and Energy Economics: 2.0% | Energy Economics: 10.5% EJOR: 10.1% Energy Policy: 8.0% Annals OR: 5.9% Omega Int J Man Sc: 3.9% Ecological Economics: 3.7% J Productivity Analysis: 2.8% J OR Society: 2.7% Environ. and Resource Economics: 2.4% |
3.2.3 Most frequently cited articles and prevalent authors
Joint production (JP) (254 publications) | Byproducts (BP) (294 publications) | Undesirable outputs (UO) (674 publications) |
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Patterson (1996): 537 Korhonen and Luptacik (2004): 392 Zhou and Ang (2008): 323 Cornes and Sandler (1984): 282 Berger et al. (1993): 259 Bagnoli and Watts (2003): 246 Wu et al. (2012): 222 Kotchen (2006): 180 Barnett and Masse (2007): 157 Wang et al. (2012): 156 Wendland et al. (2010): 145 Nalle et al. (2004): 128 van den Berg and Spauwen (2006): 124 Garcia and Thomas (2001): 121 Cornes and Sandler (1994): 116 Mandal and Madheswaran (2010): 115 Pasurka (2006): 111 Roels et al. (2010): 109 Kotchen (2005): 108 Managi et al. (2005): 107 | Linton et al. (2007): 860 Färe et al. (2005): 527 Connell (2006): 455 Färe et al. (1993): 422 Andreoni and Levinson (2001): 380 Zhou and Ang (2008): 323 Spengler et al. (1997): 208 Murty et al. (2012):184 Zaim (2004): 170 Park and Weber (2006): 140 Dakpo et al. (2016): 133 Chertow et al. (2008): 126 Mandal and Madheswaran (2010): 115 Delmas and Lessem (2014): 93 Riccardi et al. (2012): 93 Yoruk and Zaim (2005): 93 Reynaud (2003): 83 Walls and Paquin (2015): 82 Cuesta et al. (2009): 79 Stindt and Sahamie (2014): 78 | Seiford and Zhu (2002): 846 Färe et al. (2005): 527 Scheel (2001): 489 Färe et al. (1993): 422 Hailu and Veeman (2001): 397 Korhonen and Luptacik (2004): 392 Färe and Grosskopf (2004): 367 Zhou et al. (2008): 336 Zhou et al. (2007): 325 Zhou and Ang (2008): 323 Kuosmanen (2005): 283 Shi et al. (2010): 282 Kumar (2006): 274 Färe et al. (2004): 261 Reinhard et al. (1999): 256 Pittman (1983): 242 Färe et al. (1996): 230 Zhang and Choi (2013): 229 Fukuyama and Weber (2010): 228 Zhang et al. (2013): 227 |
Joint production (JP) (254 publications) | Byproducts (BP) (294 publications) | Undesirable outputs (UO) (674 publications) |
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Pasurka CA: 10 Färe R: 9 Grosskopf S: 6 Baumgärtner S: 4 Kurz HD: 4 Rodseth KL: 4 Cornes R: 3 Dumenil G: 3 Fujimoto T: 3 Griffin JM: 3 Kotchen MJ: 3 Levy D: 3 Managi S: 3 Sandler T: 3 Schefold B: 3 Seale JL: 3 Tsai WH: 3 Zhou P: 3 | Dakpo KH: 6 Desrochers P: 6 Arjomandi A: 4 Färe R: 4 Grosskopf S: 4 Lovell CAK: 4 Murty S: 4 Rentz O: 4 Selvaggi R: 4 Absi N: 3 Kumar S: 3 Managi S: 3 Pappalardo G: 3 Pecorino P: 3 Zhou P: 3 | Sueyoshi T: 31 Goto M: 24 Färe R: 18 Grosskopf S: 17 Wu J: 16 Liang L: 14 Managi S: 14 Lozano S: 13 Zhou P: 13 Zhang N: 12 Matousek R: 11 Pasurka CA: 11 Song ML: 11 Chiu YH: 10 Tsionas MG:
10 Wang K: 10 Yu MM: 10 |
3.3 Main questions and issues dealt with
4 Discussion of the results
4.1 Category mistakes in the literature on performance measurement
4.1.1 The problem of data envelopment analysis with undesirable outputs
4.1.2 Distinguish inputs and outputs categorically from outcomes and values!
If [..] the DEA problem is a general benchmarking problem, then the inputs are usually the ‘less-the-better’ type of performance measures and the outputs […] the ‘more the-better’ type […]. DEA then can be viewed as a multiple-criteria evaluation methodology where […] the DEA inputs and outputs are two sets of performance criteria where one set (inputs) is to be minimized and the other (outputs) to be maximized.
4.2 Shortcomings in the general literature on joint production
4.2.1 Relevance of important terms of joint production in the recent literature
4.2.2 Every production is coupled production, isn’t it?
The second law of thermodynamics states that in every process, there is a universal tendency toward increasing disorder, increasing entropy, a degradation of energy. In a closed system, entropy can at best remain constant; in almost every process, the total entropy of all the things involved increases to some extent, and it never decreases. As time goes on, the entropy tends to increase, and this serves to distinguish the future from the past. This is not to say that the entropy, the disorder, of part of the system cannot decrease, but that any local decrease of entropy must be compensated for by at least an equal increase somewhere else.
4.3 Coupled production and related phenomena in general economic theory
1. There are satisfying explanations for both (i) joint production of several desired goods (in the general competitive equilibrium theory à la Arrow-Debreu and in the partial equilibrium theory of industrial organisation) and (ii) joint production of desired goods and harmful bads (in the welfare theory of externalities). But both of these approaches presuppose an a priori knowledge of the character of outputs, i.e. whether they are positively or negatively valued, instead of determining it endogenously from the analysis. In the former approach, the positive character of the outputs is artificially imposed, e.g. by assuming free disposal in general equilibrium analysis or by limiting the analysis to solely the marketable outputs of a firm in industrial organisation; in the latter approach the negative character goes into the theory as a basic assumption. What we lack is a general and encompassing theory of joint production that does not simply assume, or impose, the character of the outputs as positively or negatively valued, but endogenously derives this character.2. In the case of harmful pollutants causing public negative externalities—a case that is characteristic for some of the most pressing environmental problems of our time and therefore is of utmost importance for environmental policy—economics essentially leaves us without any operational result: while there are solutions […] that work in theory, it is also clear that they will not work in practice due to incentive incompatibility.
4.4 Coupled production and related phenomena in business economic theory
From this rough overview of the most important questions […] it can be seen that one has essentially restricted oneself to examining coupled production unilaterally regarding the aspect of pricing and valuation as well as the handling of technical accounting, without sufficiently going into depth. The reasons for this are, on the one hand, the question areas that have been in the foreground up to now […] and, on the other hand, the time- and problem-related selection of certain parts of the ‘object of experience’. Whereas at the beginning of modern business science, the focus was on commercial enterprises and later on banks, these sub-areas of the research object ‘economy’ were more and more replaced by industrial enterprises, namely of the type of mechanical-technological branches of the assembly (machine, vehicle industry) and occasionally of the iron-working industry. […]Those branches of industry in which the phenomenon of coupled production is most prevalent from an economic and technical point of view, such as agricultural and mining production, the processing industries, and especially the chemical-technological industries in the broadest sense, have been dealt with in greater or lesser detail in numerous monographs, but have not been able to replace the machine-building industry from its position as the "standard example of business science" (both general and industrial). […] Even the ironworks which are relatively often used as an object of experience, e.g. blast furnace operations, still focus on economic and technical concerns to such an extent on the intended product, iron, that most authors are not fully aware of the special problems of coupled production.
[T]he decisive economic problem arises from the tensions between the special constraining conditions of production and the quite different conditions of demand. The degree of these tensions increases, on the one hand, with the rigidity of production and, on the other hand, with the degree of ties to demand. There are fundamental differences between the synthetic processes on the one hand and the analytical and exchange processes on the other hand. A virtually opposite economic school of thought permeates most of the business management issues of these types. This contrast is particularly evident with regard to the striving for economic efficiency and the technical-economic development, which, in the case of the synthetic processes, are organised towards loss-free and ballast-free single-product operation, while the other group strives for optimal material utilisation. The ever-increasing splitting of raw materials, the growing number of successive splitting stages, the connection of further processing plants, systematic research concerning intended uses with a higher beneficial effect are the visible signs of this development.
In view of the fact that multiple production appears to be the rule rather than the exception, it may well be said that single-output models have been given rather more than due attention in the literature. […] However, some justification of the predominance of single-output models in the theory of production may be sought in the fact that it is often possible to decompose a multi-product model into separate models for the respective products, […] [S]uch cases will be treated as alternative processes and only the non-decomposable models will be referred to as cases of truly joint production …
5 Conclusions
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Which types of (physical or immaterial) objects are to be considered at all in a theoretical or practical analysis? To what extent does object quality play a role and thus define different types or varieties, e.g. in waste sorting?
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To what extent do the outputs of a waste incineration, an end-of-life vehicle dismantling or (in general) a ‘reduction’ of bads constitute coupled outputs?
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How can efficient production be defined if surpluses of main products are not desired or if the preference for byproducts depends on their quantity or (unknown) usefulness? Can inefficient production be rational at all?
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Does it always make sense to prioritise avoiding unintended outputs over their recycling or disposal (as often requested by law, e.g. the German Kreislaufwirtschaftsgesetz)?
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Which model approaches are suitable for the management of material and energy flows in different types of flexible coupled production?
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What analogies exist between the allocation principles of business accounting and those of environmental management (according to ISO 14040/44)? How can the findings of cost accounting be used to improve the allocation of environmental damage to coproducts in life cycle assessment (LCA)?