Environmental preferences and technological choices: is market competition clean or dirty?

Philippe Aghion, Roland Benabou, Ralf Martin and Alexandra Roulet

CEP Discussion Papers from Centre for Economic Performance, LSE

Abstract: We investigate the effects of consumers' environmental concerns and market competition on firms' decisions to innovate in 'clean' technologies. Agents care about their consumption and environmental footprint; firms pursue greener products to soften price competition. Acting as complements, these forces determine R&D, pollution, and welfare. We test the theory using panel data on patents by 7,060 automobile-sector firms in 25 countries, environmental willingness-to-pay, and competition. As predicted, exposure to prosocial attitudes fosters clean innovation, all the more so where competition is strong. Plausible increases in both together can spur it as much as a large fuel-price increase.

Keywords: environment; product market competition; innovation (search for similar items in EconPapers)
Date: 2020-03-31
New Economics Papers: this item is included in nep-com, nep-cwa, nep-env, nep-ino and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (30)

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https://cep.lse.ac.uk/pubs/download/dp1684.pdf (application/pdf)

Related works:
Journal Article: Environmental Preferences and Technological Choices: Is Market Competition Clean or Dirty? (2023)
Working Paper: Environmental Preferences and Technological Choices: Is Market Competition Clean or Dirty? (2023)
Working Paper: Environmental Preferences and Technological Choices: Is Market Competition Clean or Dirty? (2023)
Working Paper: Environmental Preferences and Technological Choices: Is Market Competition Clean or Dirty? (2021)
Working Paper: Environmental Preferences and Technological Choices: Is Market Competition Clean or Dirty? (2020)
Working Paper: Environmental preferences and technological choices: is market competition clean or dirty? (2020)
Working Paper: Environmental Preferences and Technological Choices: Is Market Competition Clean or Dirty? (2020)
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