The impacts of the EU ETS on efficiency: An empirical analyses for German manufacturing firms
Andreas Löschel (),
Benjamin Lutz and
No 91, MEP Discussion Papers from University of Münster, Münster Center for Economic Policy (MEP)
We investigate the effect of the European Union Emissions Trading System (EU ETS) on the economic performance of manufacturing firms in Germany. Our difference-in-differences framework relies on several parametric conditioning strategies and nearest neighbor matching. As a measure of economic performance, we use the firm specific distance to the stochastic production frontier recovered from official German production census data. None of our identification strategies provide evidence for a statistically significant negative effect of emissions trading on economic performance. On the contrary, the results of the nearest neighbor matching suggest that the EU ETS rather had a positive impact on the economic performance of the regulated firms, especially during the first compliance period. A subsample analysis confirms that EU ETS increased the efficiency of treated firms in at least some two-digit industries.
Keywords: Control of Externalities; Emissions Trading; Economic Performance; Manufacturing; Difference-in-Differences; Nearest Neighbor Matching; Stochastic Production Frontier (search for similar items in EconPapers)
JEL-codes: D22 Q38 Q48 Q52 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cse, nep-eff, nep-ene, nep-env, nep-reg and nep-sbm
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Working Paper: The impacts of the EU ETS on efficiency: An empirical analyses for German manufacturing firms (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cawmdp:91
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