Analysis of the Relationship Between Agriculture, Economic Growth, and the Environment Through Keynesian Models - The Agricultural Economics of the 21st Century - page 115

and installation of machinery and equipment industry (0.043), computer manufac-
ture, communications equipment, electronic and optical products (0.223), and
manufacture of wood and cork and articles thereof, except furniture, and manufac-
ture of straw work and plaiting materials (0.378).
Relative to the other variables added to the Verdoorn relationship, the manufac-
ture of beverages presents statistical significance for the investment, with a weak
elasticity (0.003), the manufacture of textiles for water quality (2.327) and for the
waste collected selectively (0.155), the clothing industry for water quality
( 1.692), the manufacture of leather and leather products for the expenditure on
environment ( 1.629), the manufacture of wood and cork and articles thereof,
except furniture, manufacture of straw work and plaiting materials for the waste
collected selectively (0.188), the manufacture of other nonmetallic mineral prod-
ucts for water quality (0.820), the manufacture of machinery and equipment, i.e.,
for investment (0.015) and for the gaseous emissions proxy (0.179), other
manufacturing for waste collected selectively ( 0.572) and for waste collected

( 0.738), and the repair, maintenance, and installation of machinery and equipment

for investment (0.020). For other industries the other variables do not present
statistical significance. In general, and considering the industries where the new
variables added to the Verdoorn law have statistical significance, investment pre-
sents both weak and positive effects. Water quality shows strong effects, in some
cases positive and in other cases negative. Expenditure on the environment only
presents statistical significance for the manufacture of leather and leather products
and curiously both strong and negative. Waste collected selectively shows positive
and medium effects, with exception for other manufacturing where it is negative.
The proxy for gaseous emissions only bears significance for the manufacture of
machinery and equipment, and is positive.
From the results previously analyzed it seems that the original relationship of
Verdoorn is enough to study the productivity growth rate of the manufacturing
sector in the Portuguese NUTs III, namely considering the constant coefficient, the
R 2 values, and the significance of the variables added to the Verdoorn equation.
This is a sign that productivity growth and economic growth in Portugal, in the
majority of cases, for the period considered, do not depend upon environmental
conditions. On the other hand, the majority of the manufacturing sector present
great increasing returns to scale, considering the Verdoorn coefficient values.

Conclusions
This study is an innovative approach for the analysis of the relationship
between economic growth and the environment, namely because it considers
the Keynesian theory for the Portuguese context as a base. The main objective
of this study was principally to analyze the influence of environmental vari-
ables, in growth rates, in the productivity growth rate, through the Verdoorn
law over the period 2004-2011, with data disaggregated in the 30 Portuguese

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