Tariffs and the Adoption of Clean Technology Under Asymmetric Information

Rodney Ludema and Taizo Takeno ()
Additional contact information
Taizo Takeno: Department of Economics, Georgetown University, http://www9.georgetown.edu/faculty/ludemar/

Working Papers from Georgetown University, Department of Economics

Abstract: This paper examines the effect of import tariffs on the decision of a foreign monopolist to adopt "clean" technology - technology that reduces the flow of a negative cross-border externality per unit of exports. The clean technology is assumed to increase the marginal cost of production relative to the dirty technology, but only the firm knows the extent of the increase. Under complete information, we show that, despite its protectionist motivation, the importing country's optimal tariff induces the firm to adopt the clean technology if and only if it is globally efficient to do so. Under incomplete information, this efficiency property is disrupted. If the optimal tariff is decreasing in the marginal cost, then it leads the firm to bias its choice in favor of dirty technology.

JEL-codes: F13 F18 (search for similar items in EconPapers)
Date: 2006-06-09
New Economics Papers: this item is included in nep-ino, nep-ipr and nep-pr~
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www8.georgetown.edu/departments/economics/pdf/609.pdf Full text (application/pdf)
None

Related works:
Journal Article: Tariffs and the adoption of clean technology under asymmetric information (2007)
Journal Article: Tariffs and the adoption of clean technology under asymmetric information (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:geo:guwopa:gueconwpa~06-06-09

Ordering information: This working paper can be ordered from
Roger Lagunoff Professor of Economics Georgetown University Department of Economics Washington, DC 20057-1036
http://econ.georgetown.edu/

Access Statistics for this paper

More papers in Working Papers from Georgetown University, Department of Economics Georgetown University Department of Economics Washington, DC 20057-1036.
Bibliographic data for series maintained by Marcia Suss ( this e-mail address is bad, please contact ).