Cournot Competition and “Green” Innovation: An Inverted-U Relationship

Lambertini, Luca ; Poyago-Theotoky, Joanna ; Tampieri, Alessandro (2014) Cournot Competition and “Green” Innovation: An Inverted-U Relationship. Bologna: Dipartimento di Scienze economiche DSE, p. 18. DOI 10.6092/unibo/amsacta/4041. In: Quaderni - Working Paper DSE (951). ISSN 2282-6483.
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Abstract

We examine the relationship between competition and innovation in an industry where production is polluting and R&D aims to reduce emissions (“green” innovation). We present an n-firm oligopoly where firms compete in quantities and decide their investment in “green” R&D. When environmental taxation is exogenous, aggregate R&D investment always increases with the number of firms in the industry. Next we analyse the case where the emission tax is set endogenously by a regulator (committed or time-consistent) with the aim to maximise social welfare. We show that an inverted-U relationship exists between aggregate R&D and industry size under reasonable conditions, and is driven by the presence of R&D spillovers.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Lambertini, Luca
Poyago-Theotoky, Joanna
Tampieri, Alessandro
Keywords
"green" R&D, R&D spillovers, emission taxation, time-consistent emission tax, pre-commited emission tax
Subjects
ISSN
2282-6483
DOI
Deposit date
25 Jun 2014 08:39
Last modified
25 Jul 2016 08:47
URI

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