 Can privatization be a catalyst for environmental R&D and result in a cleaner environment?Tsung-Hsiu Tsai, Chia-Chi Wang and Jiunn-Rong Chiou Resource and Energy Economics, 2016, vol. 43, issue C, 1-13 Abstract: In this paper we explore whether privatization helps to catalyze a firm's environmental research and development (ER&D) and improve environmental quality. By defining ER&D as the effort undertaken by a firm to reduce its pollution per unit of output, we find in a duopoly framework that privatization cannot catalyze both public and private firms’ ER&D efforts simultaneously; it can increase one but decrease the other firm's investment, or it may even lower both firms’ ER&D investments. Moreover, when production causes severe environmental damage, or the imposition of environmental taxes poorly internalize the pollution externality, privatization may result in a poorer environment. For the sake of having a cleaner environment, policy-makers can impose higher environmental taxes on a highly polluting industry when it is being privatized. Keywords: Environmental R&D; Privatization; Mixed duopoly; Environmental taxes (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:43:y:2016:i:c:p:1-13 DOI: 10.1016/j.reseneeco.2015.10.002 Access Statistics for this article Resource and Energy Economics is currently edited by J. F. Shogren and S. Smulders More articles in Resource and Energy Economics from Elsevier |
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