Market Structure and Environmental Innovation

Juan-Pablo Montero

No 215, Documentos de Trabajo from Instituto de Economia. Pontificia Universidad Católica de Chile.

Abstract: This paper studies firms' incentives to invest in environmental R&D under different market structures (Cournot and Bertrand) and environmental policy instruments (emission standards, taxes, tradeable permits and auctioned permits). Because of market strategic effects, R&D incentives vary widely across market structures and instruments. For example, when firms' products are strategic substitutes (i.e., Cournot), either emission standards, taxes or auctioned permits can provide the most incentives. But when firms’ products are strategic complements, either taxes or auctioned permits provide the most incentives. If markets are perfectly competitive, however, permits and emission standards offer similar incentives that are lower than those offered by taxes

Keywords: Environment; regulation; market structure; innovation (search for similar items in EconPapers)
JEL-codes: L13 L50 Q28 (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (47)

Published as "Market Structure and Environmental Innovation", Journal of Applied Economics, Vol. 5, 293-325, 2002.

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Journal Article: Market Structure and Environmental Innovation (2002)
Journal Article: Market Structure and Environmental Innovation (2002)
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Persistent link: https://EconPapers.repec.org/RePEc:ioe:doctra:215

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