This paper aims at exploring the extent to which the competitiveness of the EU economy has been affected by energy and environmental taxation and innovation. Strong and narrowly strong versions of the Porter hypothesis are tested on the export dynamics of five aggregated manufacturing sectors, classified by their technological content, by means of a dynamic estimator applied to a theoretically-based gravity model. When testing the strong version, the overall effect of environmental policies does not seem to be harmful for export competitiveness of the manufacturing sector, whereas specific energy tax policies and innovation efforts positively influence export flows dynamics, revealing a Porter-like mechanism. When testing the narrowly strong version, the we find that environmental policies, as well as innovation activities, stimulate the export flows of environmental goods Those results show that EU relatively more stringent public policies, and private sector innovation patterns, both trigger higher efficiency in the production process and the value of products in markets, turning the perception of environmental policy actions from a production cost into a net benefit. These results convey useful advice for policy makers involved in the new wave of environmental tax reforms and green recovery packages currently debated at European Union level, and give support that the Porter hypothesis can be valid even in the medium-short run.
On the Green side of trade competitiveness?
MAZZANTI, Massimiliano;
2012
Abstract
This paper aims at exploring the extent to which the competitiveness of the EU economy has been affected by energy and environmental taxation and innovation. Strong and narrowly strong versions of the Porter hypothesis are tested on the export dynamics of five aggregated manufacturing sectors, classified by their technological content, by means of a dynamic estimator applied to a theoretically-based gravity model. When testing the strong version, the overall effect of environmental policies does not seem to be harmful for export competitiveness of the manufacturing sector, whereas specific energy tax policies and innovation efforts positively influence export flows dynamics, revealing a Porter-like mechanism. When testing the narrowly strong version, the we find that environmental policies, as well as innovation activities, stimulate the export flows of environmental goods Those results show that EU relatively more stringent public policies, and private sector innovation patterns, both trigger higher efficiency in the production process and the value of products in markets, turning the perception of environmental policy actions from a production cost into a net benefit. These results convey useful advice for policy makers involved in the new wave of environmental tax reforms and green recovery packages currently debated at European Union level, and give support that the Porter hypothesis can be valid even in the medium-short run.I documenti in SFERA sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
