The impacts of the EU ETS on efficiency and economic performance – An empirical analyses for German manufacturing firms

Andreas Löschel, Benjamin Johannes Lutz, Shunsuke Managi

Research output: Contribution to journalArticlepeer-review

17 Citations (Scopus)

Abstract

We investigate the effect of the European Union Emissions Trading System (EU ETS) on the economic performance of manufacturing firms in Germany. Our difference-in-differences framework relies on several parametric conditioning strategies and nearest neighbor matching. As a measure of economic performance, we use the firm specific distance to the stochastic production frontier recovered from official German production census data. None of our identification strategies provide evidence for a statistically significant negative effect of emissions trading on economic performance. On the contrary, the results of the nearest neighbor matching suggest that the EU ETS rather had a positive impact on the economic performance of the regulated firms, especially during the first compliance period. A subsample analysis confirms that EU ETS increased the efficiency of treated firms in at least some two-digit industries.

Original languageEnglish
Pages (from-to)71-95
Number of pages25
JournalResource and Energy Economics
Volume56
DOIs
Publication statusPublished - May 2019

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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