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Modelling green knowledge production and environmental policies with semiparametric panel data regression models

Author

Listed:
  • Antonio Musolesi

    (University of Ferrara and SEEDS)

  • Davide Golinelli

    (University of Ferrara and SEEDS)

  • Massimiliano Mazzanti

    (University of Ferrara and SEEDS)

Abstract

This paper introduces a novel semiparametric econometric framework for policy evaluation and estimates a green knowledge production function for a large, 30-year panel dataset of high-income countries. Due to the substantial uncertainty in the data-generating process and the potential presence of nonlinearities and latent common factors, the paper explores semiparametric panel specifications that go beyond interactive fixed effects fully parametric models. The findings suggest that (i) the semiparametric additive specification with individual time trends is the preferred model, (ii) threshold effects and nonlinearities are salient features of the data that parametric specifications fail to capture, and (iii) the impact of environmental policy is noteworthy and exhibits clear heterogeneity when modelled as a nonparametric function of specific knowledge inputs. The evidence reveals a significant nonlinear policy inducement effect stemming from R&D investments.

Suggested Citation

  • Antonio Musolesi & Davide Golinelli & Massimiliano Mazzanti, 2025. "Modelling green knowledge production and environmental policies with semiparametric panel data regression models," Empirical Economics, Springer, vol. 68(1), pages 327-352, January.
    • Handle: RePEc:spr:empeco:v:68:y:2025:i:1:d:10.1007_s00181-024-02634-8
    DOI: 10.1007/s00181-024-02634-8
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    More about this item

    Keywords

    Green knowledge generation; Environmental policy; Heterogeneous policy effect; Large panels; Interactive Fixed effects; Spline functions; Model selection;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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