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The results based on the nonparametric nearest neighbor matching suggest astatistically significant positive effect of the EU ETS on the economicperformance of the regulated firms during Phase I of the EU ETS. A year-by-yearanalysis shows that the effect was only significant during the first year ofPhase I. The EU ETS, therefore, had a particularly strong effect when it wasintroduced. It is important to note that the EU ETS does not homogeneouslyaffect firms in the manufacturing sector. We found a significant positiveimpact of EU ETS on the economic performance of regulated firms in the paperindustry.

Study Of German Manufacturing Firms: Causal Impact Of European Union Emission Trading Scheme On Firm Behaviour And Economic Performance