Transboundary Pollution and Absorptive Capacity

Slim Ben Youssef ()

MPRA Paper from University Library of Munich, Germany

Abstract: The impact of the investment in absorptive capacity on transboundary pollution is studied by considering two countries each of them regulating a firm. Firms can invest in original research and in absorptive research to lower their pollution intensity. The absorptive research enables a firm to capture part of the original research made by the other one. We show that by means of adequate emission taxes, original and absorptive R&D subsidies, non-cooperating regulators can reach the social optimum. Interestingly, we show that the investment in absorptive research enables non-cooperating regulators to better internalize transboundary pollution. The higher is the ability parameter of absorption, the greater is the proportion of transboundary pollution internalized. Therefore, it is recommended for the international community to make the patent laws more flexible and enabling learning from the research made by others more interesting.

Keywords: Transboundary Pollution; Original Research; Absorptive Research; Internalization; Social Optimum. (search for similar items in EconPapers)
JEL-codes: D62 O32 H23 C72 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-ene and nep-env
Date: 2009-09-05
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Persistent link: http://EconPapers.repec.org/RePEc:pra:mprapa:17158

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