Environmental protection expenditures and EU ETS: Evidence from Romania

Alexandra-Anca Purcel

Finance Research Letters, 2023, vol. 58, issue PB

Abstract: We examine the impact of the European Union Emissions Trading System (EU ETS) on environmental protection expenditures over 2014–2015 for a representative sample of firms, which activate on Romanian territory. First, the findings reveal that EU ETS positively impacts current expenditures, namely, the short-time behavior of firms. Second, the results based on the investments selection model show that EU ETS has no statistically significant effect on the likelihood to invest, and the amount invested (i.e., long-term behavior). Overall, these results suggest that the EU ETS is a viable instrument, acting as a pivotal incentive for firms to undertake environmental expenditures.

Keywords: Environmental expenditures and investments; EU ETS; Firms; Climate policy; Panel analysis (search for similar items in EconPapers)
JEL-codes: Q52 Q59 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:58:y:2023:i:pb:s1544612323007900

DOI: 10.1016/j.frl.2023.104418

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