Environmental policy, licensing strategy, and social welfare

Yen-Ju Lin, Yan-Shu Lin, Tsung-Han Chou and Pei-Cyuan Shih ()
Additional contact information
Yen-Ju Lin: Fo Guang University
Yan-Shu Lin: National Dong Hwa University
Tsung-Han Chou: National Dong Hwa University
Pei-Cyuan Shih: Ming Chuan University

Journal of Economics, 2024, vol. 143, issue 2, No 2, 159 pages

Abstract: Abstract This paper sets up a three-stage game (technology licensing, emission tax, and output) in which one foreign firm owns both process technology and environmental technology. We compare three types of licensing strategies, process technology, environmental technology, and package licensing, showing that the licensor’s preference on licensing strategy depends on the level of marginal environmental damage. Specifically, if the environmental damage caused by the production of the home firm is large, the package licensing deal is preferred by the foreign firm; otherwise process licensing is preferred. It is also found that the social welfare may be lower after licensing.

Keywords: Environmental policy; Technology licensing; Social welfare (search for similar items in EconPapers)
JEL-codes: F18 H23 L13 Q56 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:143:y:2024:i:2:d:10.1007_s00712-024-00873-y

DOI: 10.1007/s00712-024-00873-y

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