Environmental taxes and economic growth: Evidence from panel causality tests

Abstract

The aim of this study is to determine the causal relationship between environmental taxes and economic growth, using different measures of environmental taxes with GDP as well as adjusted net savings. A panel of European countries and a separate panel of OECD countries are used from 1995 to 2006 and the standard Granger noncausality approach is applied. The results suggest some evidence of long-run causality running from economic growth to increased revenue from the environmental taxes, with also some evidence of short-run causality in the reverse direction. The inclusion of population and a proxy for economic subsidies had little effect on the long-run relationship, although the proxy for subsidies did have some short-run effect on growth.

Food Safety and Security in Romania – An Econometric Analysis in the Context of National Agricultural Paradigm Transformation

“…Further, co-integration tests are used to examine the long-term relationships between the variables. As a result, after identifying a set of first order integrated series, the next step is to perform co-integration analysis as a technique to investigate the existence of a long-term relationship between the set of embedded variables in question (Abdullah and Morley, 2014;Phillips and Hansen, 1990). …”

“…Amfiteatru Economic coefficients (for the Error Correction Term -ECT), Granger, Huangb and Yang (2000); Abdullah and Morley (2014) for the conjugate meaning (F statistics) of the lag explanatory variables, while also revealing the advantages noted by Bond (2002).…”

The Impact and Determinants of Environmental Taxation on Economic Growth Communities in Romania

“…As has been proven in the literature [28][29][30], if there is co-integration in a pair of series that are integrated of order one, I (1), there must be causation in at least one direction. Starting from this assumption, this appears to be a result of the presence of cointegration, implying that an error correction model can be formed, of which the error correction term has a significant effect on the dependent variable.…”

“…Starting from this assumption, this appears to be a result of the presence of cointegration, implying that an error correction model can be formed, of which the error correction term has a significant effect on the dependent variable. Moreover, in the literature it has been proven that the inter-linkages between the energy sector and the economic performance are dependent to a great extent on the development level and economic structure of the considered countries [30][31][32][33][34][35].…”

Environmental Regulation, Economic Network and Sustainable Growth of Urban Agglomerations in China

“…The first set of theories took R&D activity into account in an endogenous growth model, simulating the impact of environmental regulation on economic growth [19,20]. Abdullah and Morley [21] used panel causality tests to analyze the causal effect of environmental taxes on economic growth, identifying some evidence of short-run causality. McGowan [22] examined the interplay between regulation and innovation by comparing the regulatory context that promoted the diffusion of shale gas techniques with the responses to its potential development across different countries.…”