Modeling Green Knowledge Production and Environmental Policies with Semiparametric Panel Data Regression models

Massimiliano Mazzanti and Antonio Musolesi ()
Additional contact information
Antonio Musolesi: University of Ferrara; SEEDS, Italy

No 1420, SEEDS Working Papers from SEEDS, Sustainability Environmental Economics and Dynamics Studies

Abstract: Innovation is a primary engine of sustainable growth. This paper provides a new semiparametric econometric policy evaluation framework and estimates a green knowledge production function for a large, 30-year panel dataset of high-income countries. Because of the high degree of uncertainty surrounding the data-generating process and the likely presence of nonlinearities and latent common factors, the paper considers semiparametric panel specifications that extend interactive fixed effects fully parametric models such as the multifactor error model and the random trend model. It also adopts a recently proposed information criterion for smooth model selection to compare these semiparametric models and their parametric counterparts. The results indicate that (1) the semiparametric additive specification with individual time trends is the preferred model, (2) threshold effects and nonlinearities are relevant features of the data that are obscured in parametric specifications, and (3) the effect of environmental policy is significant and clearly heterogeneous when modeled as a nonparametric function of certain knowledge inputs. The evidence shows a relevant nonlinear policy inducement effect occurring through R&D investments.

Keywords: green knowledge generation; environmental policy; heterogeneous policy effect; large panels; interactive fixed effects; spline functions; model selection. (search for similar items in EconPapers)
JEL-codes: C14 C23 C52 O3 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2020-09, Revised 2020-09
New Economics Papers: this item is included in nep-eff, nep-env and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.sustainability-seeds.org/papers/RePec/srt/wpaper/1420.pdf First version, 2020 (application/pdf)
http://www.sustainability-seeds.org/papers/RePec/srt/wpaper/1420.pdf Revised version, 2020 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:srt:wpaper:1420

Access Statistics for this paper

More papers in SEEDS Working Papers from SEEDS, Sustainability Environmental Economics and Dynamics Studies
Bibliographic data for series maintained by Alessandro Palma ().