What the study found
Environmental taxes were not robustly related to sectoral eco-investments in the seven EU countries and four sectors studied. The authors report that a strong relationship appears only when the variables are left in absolute terms, but it disappears after normalizing by sectoral gross value added (GVA, the value added by a sector's output).
Why the authors say this matters
The authors say the findings suggest a need to rethink policy through more targeted use of tax revenues, sectoral differentiation, and combining tax tools with non-fiscal mechanisms for managing the financial risk of the transition.
What the researchers tested
The study used a country-sector panel for seven EU member states and four NACE Rev. 2 sectors over 2014–2023, with all monetary values in 2015 real prices. The analysis combined diagnostic tests, descriptive statistics, correlation analysis, fixed-effects panel regressions with control variables, a Granger causality test, and nine robustness checks.
What worked and what didn't
The absolute values of environmental taxes and eco-investments showed a very high correlation, but this scale effect disappeared after normalizing by sectoral GVA, where the correlation was practically zero and statistically insignificant. The panel regressions found no statistically significant relationship, and the Granger test did not confirm causality in either direction; adding eco-expenditures, GVA growth, and sector interaction effects did not change this.
What to keep in mind
The findings are limited to the sample under consideration: seven EU countries, four sectors, and the 2014–2023 period. The abstract does not describe other limitations beyond this scope.
Key points
- Environmental taxes were not robustly linked to sectoral eco-investments in the sample studied.
- The apparent correlation was strong only in absolute terms and disappeared after normalization by sectoral GVA.
- Fixed-effects panel regressions found no statistically significant relationship.
- A Granger causality test did not confirm causality in either direction.
- Nine robustness checks supported the same overall finding.
Disclosure
- Research title:
- Environmental taxes show no robust link to sectoral eco-investments
- Authors:
- Vanya Georgieva
- Institutions:
- Agricultural University Plovdiv
- Publication date:
- 2026-04-02
- OpenAlex record:
- View
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