nep-res New Economics Papers
on Resource Economics
Issue of 2015‒12‒08
four papers chosen by
Maximo Rossi
Universidad de la República

  1. Carbon tax, pollution and spatial location of heterogeneous firms By Nelly Exbrayat; Stéphane Riou; Skerdilajda Zanaj
  2. Environmental regulation and sustainable competitiveness: Evaluating the role of firm-level green investments in the context of the Porter hypothesis By Jana Stoever; John P. Weche
  3. Going Green : Framing Effects in a Dynamic Coordination Game By Gerlagh, Reyer; van der Heijden, Eline
  4. Does green corporate investment really crowd out other business investment? By John P. Weche

  1. By: Nelly Exbrayat (Jean Monnet University, IAE, Saint-Etienne); Stéphane Riou (Jean Monnet University, IAE, Saint-Etienne); Skerdilajda Zanaj (CREA, Université de Luxembourg)
    Abstract: In this paper, we investigate the e¤ects of a global carbon tax and its ability to curb carbon emissions in a two-country setup characterized by an uneven spatial distribution of mobile heterogeneous firms. Trade takes place between the two asymmetric countries and carbon dioxide (CO2) emissions are a by-product of the production activity of manufac- turing firms. We advance the hypothesis that although a global carbon tax is an attractive environmental measure, it may be subject to debate because, among other effects, it can have a significant impact on the location of heterogeneous firms as well as on foreign trade patterns worldwide.
    Keywords: Global carbon tax: spatial selection, heterogeneous firms
    JEL: F12 F15 H87 Q28
    Date: 2015
  2. By: Jana Stoever (Hamburg Institute of International Economics and Hamburg University); John P. Weche (Monopolies Commission and Leuphana University Luneburg, Germany)
    Abstract: We investigate the impact of environmental regulation on firm performance and investment behavior. Exploiting the case of a German water withdrawal regulation that is managed on the state level, we analyze firms’ reactions to an increase in the water tax using a regression-adjusted difference-in-differences approach. We analyze the individual firm’s response to a change in environmental regulation, distinguishing between add-on and integrated environmental investments. This allows us to include intra-firm innovations into our analysis, which are likely to be of importance for increasing resource-efficiency. Our results show that the regulation in question shows no sign of affecting firms’ overall competitiveness. The results imply that the predicted negative impact of the regulation on firms’ economic performance that was brought up before the introduction of the tax, does not seem to weigh heavily in this case. Nevertheless, when placed into a sustainable competitiveness context, the regulation considered does not qualify as an appropriate policy tool for fostering green growth.
    Keywords: Environmental regulation, DID, green growth, green investment, Porter hypothesis, sustainable competitiveness, water withdrawal regulation
    JEL: L60 O31 O32 Q58 Q55
    Date: 2015–11
  3. By: Gerlagh, Reyer (Tilburg University, Center For Economic Research); van der Heijden, Eline (Tilburg University, Center For Economic Research)
    Abstract: We experimentally study decision-making in a novel dynamic coordination game. The game captures features of a transition between externality networks. Groups consisting of three subjects start in a stable benchmark equilibrium with network externality. Over seven rounds, they can transit to an alternative stable equilibrium based on the other network. The alternative network has higher payoffs, but the transition is slow and costly. Coordination is required to implement the transition while minimizing costs.<br/>In the experiment, the game is repeated five times, which enables groups to learn to coordinate over time. We compare a neutral language treatment with a ‘green framing’ treatment, in which meaningful context is added to the instructions. We find the green framing to significantly increase the number of profitable transitions, but also to inhibit the learning from past experiences, and thus it reduces coherence of strategies. Consequently, payoffs in both treatments are similar even though the green framing results in twice as many transitions.<br/>In the context of environmental policy, the experiment suggests general support for ‘going green’, but we also find evidence for anchoring of beliefs by green framing; proponents and opponents stick to their initial strategies.
    Keywords: cost of transition; lab experiment; dynamic stag hunt game; framing
    JEL: C73 C92 O44
    Date: 2015
  4. By: John P. Weche (Monopolies Commission and Leuphana University Luneburg, Germany)
    Abstract: Empirical studies on the link between green investment and other business investment at the firm level either focus on innovation specific types of investment or fail to consider the simultaneity of investment decisions. The analysis to be presented here offers a broad focus on different types of environmental protection investment and explicitly considers simultaneity issues, using newly created panel data for German manufacturing firms. Germany is an ideal case for testing the crowding-out hypothesis, due to its high level of environmental regulation and a significant presence of command-and-control style measures, which are especially under debate as a source of crowding-out. The estimation of a behavioral investment model supports a crowdingout of other business investment through environmental protection investment in general as well as its subcategories of add-on measures and investments in renewable energy. However, only the latter subcategory causes a crowding-out at the industry level.
    Keywords: green investment; business investment; renewable energy; crowding-out; manufacturing; Germany
    JEL: O32 O33 Q42 Q55
    Date: 2015–11

This nep-res issue is ©2015 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.