Socioeconomics Research Seminar
A Semiparametric Analysis of Green Inventions and Environmental Policies
Innovation is a primary engine of sustainable growth. It contributes to compensate the emission increases by enhancing environmental productivity. This paper provides a new econometric policy evaluation assessment of green technological patterns and estimates a green knowledge production by exploiting a 30 years long panel dataset of high-income countries. Because the high degree of uncertainty surrounding the Data Generating Process and the likely presence of nonlinearities and latent common factors, it considers semiparametric panel specifications which extend the Common Correlated Effects approach and the random trend model and adopts a recently proposed information criterion for smooth model selection to compare these models and alternative and more common parametric specifications. The results indicate that (1) semiparametric additive specifications with individual time trends emerge among the set of potential models, (2) threshold effects and nonlinearities are relevant features of the data which are obscured in parametric specifications (3) the effect of the policy is significant and it is clearly heterogeneous when modelled as a nonparametric function of some covariates.
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