The downstream firm's decision over R&D for energy-saving

Chia-Chi Wang, Ying-Da Wang and Jiunn-Rong Chiou

Energy Economics, 2024, vol. 140, issue C

Abstract: Although energy saving for a firm is very important, the R&D literature has rarely discussed this issue. This paper provides a vertically-related model to analyze how conducting energy-saving R&D affects the upstream firm's pricing decision and downstream firm's energy-saving and output decisions. We show that an increase in energy price may induce the downstream firm to purchase more energy, but less efficient R&D may not induce the downstream firm to purchase more energy. Moreover, more efficient R&D may not increase the energy price under the upstream monopoly case. Finally, social welfare may not improve when the upstream market becomes more competitive.

Keywords: R&D; Energy saving; Vertically-related market (search for similar items in EconPapers)
JEL-codes: D42 M11 O32 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:140:y:2024:i:c:s0140988324006984

DOI: 10.1016/j.eneco.2024.107990

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