The Effect of Green Taxes on Labor Productivity in the Iranian Economy

Authors

Faculty of Economics, University of Tehran, Tehran, Iran

Abstract

his study attempts to examine the empirical relationship between gasoline taxes (as the most effective energy carrier of emissions) and labor productivities in the case of Iran using the time series data for the period 1990-2015  usingthe autoregressive distributed lag (ARDL) approach. This research tests the interrelationship between the variables using the bounds testing to cointegration procedure. First, we estimated gasoline demand function by ARDL method and thereafter we subordinated the estimated gasoline demand as regressors in the per capita of labor productivity function. According to price variation in the gasoline demand, we calculated the effect of the green tax on labor productivity over three scenarios.
The results imply green tax over three scenarios even though Porter Hypothesis has a negative impact on the labor productivity. Estimating the Error Correction model reveals that the speed of adjustment to restore equilibrium is a stable long-run relationship.
 

Keywords


Acemoglu, D., Aghion, P., Bursztyn, L., & Hemous, D. (2012). The Environment and Directed Technical Change. American Economic Review, 102(1), 131-166.

 

 

 

Adenikinju, A., & Olumuyiawa, A. (1999). Energy Use and Productivity Performance in the Nigerian Manufacturing Sector. OPEC Review, Retrieved from

https://onlinelibrary.wiley.com/doi/pdf/10.1111/1468-0076.00066.

 

Ambec, S., & Barla, P. (2006). Can Environmental Regulation be Good for Business? An Assessment of the Porter Hypothesis. Energy Studies Review, 14(2), 42–62.

 

Ambec, S., Cohen, M. A., Elgie, S., & Lanoie, P. (2011). The Porter Hypothesis at 20. Discussion Paper, 11-01, Retrieved from

 

Grossman Britt Pollution TAX. (1999). Environment Economics and Management Faculty of Economics. Working Paper, 12036-12, Retrieved from

 

Jaffe, A., & Palmer, K. (1997). Environmental Regulation and Innovation: A Panel Data Study. Review of Economics and Statistics, 79(4), 610-619.

 

Koźluk, T., & Zipperer, V. (2013). Environmental Policies and Productivity Growth: A Critical Review of Empirical Findings. OECD Economics Department Working Papers, 1096, Retrieved from https://search.proquest.com/docview/1465244236?pq-origsite=gscholar.

 

Leeuwen, G., & Mohnen, P. (2017). Revisiting the Porter hypothesis: an empirical analysis of Green innovation for the Netherlands, Economics of Innovation and New Technology, 26(1-2), 63-77.

 

Narayan, P. K. (2005). The Saving and Investment Nexus for China: Evidence from Cointegration Tests. Applied Economics, 37, 1979-1990.

 

 

Pesaran, H. M., & Shin, Y. (1999). Autoregressive Distributed Lag Modeling Approach to Cointegration Analysis. In S. Storm (Ed.), Econometrics and Economic Theory in the 20th Century: The Ragner Frisch Centennial Symposium. Cambridge: Cambridge University Press.

 

Pesaran, M. H., Shin, Y., & Smith, R. J. (2001). Bounds Testing Approaches to the Analysis of Level Relationships. Journal of Applied Economics, 16, 289-326.

 

Popp, D., Newell, R. G., & Jaffe, A. B. (2010). Energy, the Environment, and Technological Change (21), Handbooks of the Economics of Innovation. Amsterdam: Elsevier Science Publishers.

 

Porter, M. (1991). America’s Green Strategy. Scientific American, 264(4), 168-175.

 

Porter, M., & van der Linde, C. (1995). Toward a New Conception of the Environment-Competitiveness Relationship. Journal of Economic Perspectives, 9(4), 97-118.

 

Wagner, M. (2003). The Porter Hypothesis Revisited: A Literature Review of Theoretical Models and Empirical Tests. Research Memorandum Center for Sustainability Management (SM), Retrieved from

https://econwpa.ub.uni-muenchen.de/econ-wp/pe/papers/0407/0407014.pdf.

 

Wang, C. (2011). Sources of Energy Productivity Growth and its Distrbution Dynamics in China. Resource and Energy Economics, 33, 279-292.