Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/148934
Authors: 
Löschel, Andreas
Lutz, Benjamin Johannes
Managi, Shunsuke
Year of Publication: 
2016
Series/Report no.: 
CAWM Discussion Paper, Centrum für Angewandte Wirtschaftsforschung Münster 91
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.
Subjects: 
Control of Externalities
Emissions Trading
Economic Performance
Manufacturing
Difference-in-Differences
Nearest Neighbor Matching
Stochastic Production Frontier
JEL: 
Q52
D22
Q38
Q48
Document Type: 
Working Paper

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