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

  • Yang, Chih-Hai
  • Tseng, Yu-Hsuan
  • Chen, Chiang-Ping
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    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.

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    Article provided by Elsevier in its journal Resource and Energy Economics.

    Volume (Year): 34 (2012)
    Issue (Month): 4 ()
    Pages: 514-532

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    Handle: RePEc:eee:resene:v:34:y:2012:i:4:p:514-532
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