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| Dierk Herzer |
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| ''A panel data analysis of the long-run effect of environmental taxes on R&D expenditures at the macro-level'' |
| ( 2024, Vol. 44 No.3 ) |
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| Whether and how environmental taxes affect R&D at the macro-level is an empirical question that has not been addressed in the literature. This paper fills this gap by examining the impact of environmental taxes on R&D expenditures using panel data for the period 1994-2021 from 49 countries. The main results of this study are as follows: (i) environmental taxes have, on average, a positive long-run effect on R&D expenditures; (ii) the direction of causality runs from environmental taxes to R&D and not from R&D to environmental taxes; and (iii) while the long-run effect of environmental taxes varies across countries, it is positive in almost all cases, suggesting that the average positive long-run effect of environmental taxes on R&D is not driven by a few countries. We also find some evidence of a positive effect of environmental taxes on both environmental and non-environmental R&D, based on a smaller sample of countries over a shorter time period. |
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| Keywords: environmental taxes, R&D expenditures, heterogeneous panel data techniques |
JEL: O3 - Technological Change; Research and Development: General
H2 - Taxation, Subsidies, and Revenue: General |
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| Manuscript Received : Aug 05 2024 | | Manuscript Accepted : Sep 30 2024 |
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