Environmental policy and profitability. Evidence from Swedish industry
2010 (English)In: Environmental Economics and Policy Studies, ISSN 1432-847X, Vol. 12, no 1/2, 59-78 p.Article in journal (Refereed) Published
This study investigates the effect of a CO<sub>2</sub> tax on profitability by using firm-level data on output and inputs from Swedish industry between 1990 and 2004. The purpose of this exercise is to investigate the validity of the so-called Porter hypothesis. By utilizing a factor-demand modeling approach, and specifying a profit function that has a technology component dependent upon firm-specific effective tax on CO<sub>2</sub>, we are able to separate out the effect of regulatory pressure on technological progress. The results indicate that there is evidence of a “reversed” Porter effect in most industrial sectors, especially in energy-intensive industries; that is, after controlling for the fuel price effect, technological progress and consequently profits are further negatively affected by the CO<sub>2</sub> tax.
Place, publisher, year, edition, pages
2010. Vol. 12, no 1/2, 59-78 p.
Research subject Economics
IdentifiersURN: urn:nbn:se:umu:diva-37115DOI: 10.1007/s10018-010-0163-8OAI: oai:DiVA.org:umu-37115DiVA: diva2:357967
[ABSTRACT FROM AUTHOR]2010-10-202010-10-202011-02-16