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

Chih-Hai Yang, Yu-Hsuan Tseng and Chiang-Ping Chen

Resource and Energy Economics, 2012, vol. 34, issue 4, 514-532

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.

Keywords: Environmental regulations; R&D; Productivity; Porter hypothesis (search for similar items in EconPapers)
JEL-codes: L60 O13 Q55 Q58 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (127)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:34:y:2012:i:4:p:514-532

DOI: 10.1016/j.reseneeco.2012.05.001

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