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Determinants of Environmental Expenditure and Investment: Evidence from Sweden

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Abstract

This paper provides new evidence on the determinants of environmental expenditure and investment. Also, by employing the Heckman selection models, we study how environmental expenditure and investment by Swedish industrial firms responded to the national and international policies directed to mitigate air pollution during the period 1999 through 2008. We find that firms that use carbon intensive fuels such as oil and gas are more likely to spend to and invest in the environment. Larger, more profitable and more energy intensive firms are more likely to incur environmental expenditure/investment. Overall, an important finding of our econometric analysis is that environmental regulation both on the national and international levels are highly relevant motivations for environmental expenditure and investment.

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  • Jaraite, Jurate & Kažukauskas, Andrius & Lundgren, Tommy, 2012. "Determinants of Environmental Expenditure and Investment: Evidence from Sweden," CERE Working Papers 2012:7, CERE - the Center for Environmental and Resource Economics.
    • Handle: RePEc:hhs:slucer:2012_007
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    File URL: http://www-sekon.slu.se/~gbost/CERE_WP2012-7.pdf
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    Cited by:

    1. Pasquale Marcello Falcone, 2018. "Green investment strategies and bank-firm relationship: a firm-level analysis," Economics Bulletin, AccessEcon, vol. 38(4), pages 2225-2239.
    2. Aleksandra Pieloch-Babiarz & Anna Misztal & Magdalena Kowalska, 2021. "An impact of macroeconomic stabilization on the sustainable development of manufacturing enterprises: the case of Central and Eastern European Countries," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(6), pages 8669-8698, June.

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    More about this item

    Keywords

    environmental expenditure and investment; environmental policy; EU ETS; panel data;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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