A panel data analysis of the long-run effect of environmental taxes on R&D expenditures at the macro-level

Herzer, Dierk

A panel data analysis of the long-run effect of environmental taxes on R&D expenditures at the macro-level

Publication date

2024-09-30

Document type

Working Paper

Author

Herzer, Dierk

Organisational unit

VWL, insb. Konjunktur und Wachstum

URL

http://www.accessecon.com/Pubs/EB/2024/Volume44/EB-24-V44-I3-P91.pdf

URI

https://openhsu.ub.hsu-hh.de/handle/10.24405/23852

Publisher

University of Illinois

Series or journal

Economics Bulletin

ISSN

1545-2921

Periodical volume

44

Periodical issue

3

First page

1169

Last page

1180

Part of the university bibliography

✅

Language

English

Abstract

Whether and how environmental taxes affect R&D at the macro-level is an empirical question that has not been addressed in the literature. This paper fills this gap by examining the impact of environmental taxes on R&D expenditures using panel data for the period 1994-2021 from 49 countries. The main results of this study are as follows: (i) environmental taxes have, on average, a positive long-run effect on R&D expenditures; (ii) the direction of causality runs from environmental taxes to R&D and not from R&D to environmental taxes; and (iii) while the long-run effect of environmental taxes varies across countries, it is positive in almost all cases, suggesting that the average positive long-run effect of environmental taxes on R&D is not driven by a few countries. We also find some evidence of a positive effect of environmental taxes on both environmental and non-environmental R&D, based on a smaller sample of countries over a shorter time period.

Version

Published version

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