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

Chih Hai Yang; Yu Hsuan Tseng; Chiang Ping Chen

doi:10.1016/j.reseneeco.2012.05.001

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

Chih Hai Yang, Yu Hsuan Tseng, Chiang Ping Chen

Department of Economics

Research output: Contribution to journal › Article › peer-review

304 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 language	English
Pages (from-to)	514-532
Number of pages	19
Journal	Resource and Energy Economics
Volume	34
Issue number	4
DOIs	https://doi.org/10.1016/j.reseneeco.2012.05.001
State	Published - Nov 2012

Keywords

Environmental regulations
Porter hypothesis
Productivity
R&D

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10.1016/j.reseneeco.2012.05.001

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

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.",

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N2 - 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.

AB - 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.

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KW - Porter hypothesis

KW - Productivity

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JO - Resource and Energy Economics

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ER -

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

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Keywords

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