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Environmental tax and productivity in a decentralized context: new findings on the Porter hypothesis

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  • Anabel Zárate-Marco

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  • Jaime Vallés-Giménez

Abstract

This paper studies, for the first time, the effects of environmental taxes on efficiency gains and the growth of the regions. To this end, we have estimated a dynamic panel-data model to the context of the Spanish regions that reflects the effects of environmental taxation and regulation separately. The results provides further empirical evidence in favour of the Porter hypothesis, to the extent that a strict environmental policy implemented via green taxes rather than regulation may raise productivity, which may be because they drive organizational and technological change in firms seeking to reduce their tax payments. Copyright Springer Science+Business Media New York 2015

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  • Anabel Zárate-Marco & Jaime Vallés-Giménez, 2015. "Environmental tax and productivity in a decentralized context: new findings on the Porter hypothesis," European Journal of Law and Economics, Springer, vol. 40(2), pages 313-339, October.
  • Handle: RePEc:kap:ejlwec:v:40:y:2015:i:2:p:313-339
    DOI: 10.1007/s10657-013-9400-5
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    Keywords

    Regional green taxes; Porter hypothesis; Regional growth; Productivity; H23; H71; O44;

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth

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