Environmental regulations, induced R&D, and productivity: Evidence from Taiwan's manufacturing industries

Chih Hai Yang, Yu Hsuan Tseng, Chiang Ping Chen

Research output: Contribution to journalArticlepeer-review

216 Scopus citations

Abstract

This paper examines whether stringent environmental regulations induce more R&D and promote further productivity in Taiwan. Using an industry-level panel dataset for the 1997-2003 period, empirical results show that pollution abatement fees, a proxy for environmental regulations, is positively related to R&D expenditure, implying that stronger environment protection induces more R&D. On the other hand, pollution abatement capital expenditures do not have a statistically significant influence on R&D. Further evaluation of the influence of induced R&D by environment regulations on industrial productivity shows a significant positive association between them. This finding supports the Porter hypothesis that more stringent environmental regulations may enhance rather than lower industrial competitiveness.

Original languageEnglish
Pages (from-to)514-532
Number of pages19
JournalResource and Energy Economics
Volume34
Issue number4
DOIs
StatePublished - Nov 2012

Keywords

  • Environmental regulations
  • Porter hypothesis
  • Productivity
  • R&D

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