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The Effects of a 2016 Electricity Tax Reform on French Manufacturing:Evidence from Micro-Panel Data

Author

Listed:
  • Melanie Marten

    (Université de Cergy-Pontoise, THEMA)

Abstract

This paper investigates the impact of a 2016 electricity tax reform on French manufacturing using micro-panel data spanning eight years. The reform intro- duced a tax reduction on electricity use contingent on gross electricity tax liabil- ity exceeding 0.5% of firm value-added. Firms that satisfy the threshold criteria are considered electro-intensive. This paper exploits a Differences-in-Differences (DiD) event study specification to estimate the effect of the tax cut relative to inel- igible firms. On average, electro-intensive firms experienced a relative drop in in their average electricity costs ranging between 8.5% and 12.4% in the post-reform period. Findings also uncover heterogeneous effects across manufacturing sectors. Nevertheless, results do not indicate that the reform had a significant or robust im- pact on either energy use input choice or on economic performance.

Suggested Citation

  • Melanie Marten, 2024. "The Effects of a 2016 Electricity Tax Reform on French Manufacturing:Evidence from Micro-Panel Data," THEMA Working Papers 2024-02, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    • Handle: RePEc:ema:worpap:2024-02
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    File URL: https://thema.u-cergy.fr/IMG/pdf/electricitytax_marten_m._.pdf
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    More about this item

    Keywords

    Electricity tax; Policy Evaluation; Manufacturing; France;
    All these keywords.

    JEL classification:

    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • L6 - Industrial Organization - - Industry Studies: Manufacturing

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