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Cournot Competition and "Green" Innovation: An Inverted-U Relationship

Luca Lambertini (), Joanna Poyago-Theotoky and Alessandro Tampieri ()

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: We evaluate the relationship between competition and innovation in an industry where production is polluting and R&D has the aim to reduce emissions. We build up an oligopoly model where n firms com- pete in quantities and decide their investment in green R&D. When environmental taxation is exogenous, the investment in green R&D always increases with the number of firms in the industry. We analyse next the case where taxation is endougenously determined by a regu- lator with the aim to maximise social welfare. An inverted-U rela- tionship exists under reasonable conditions, and it is driven by the presence of spillovers.

Keywords: green R&D; Pigouvian taxation (search for similar items in EconPapers)
JEL-codes: Q55 Q56 O30 L13 (search for similar items in EconPapers)
Date: 2014
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Related works:
Journal Article: Cournot competition and “green” innovation: An inverted-U relationship (2017) Downloads
Working Paper: Cournot Competition and "Green" Innovation: An Inverted-U Relationship (2015) Downloads
Working Paper: Cournot Competition and "Green" Innovation: An Inverted-U Relationship (2015) Downloads
Working Paper: Cournot Competition and "Green" Innovation: An Inverted-U Relationship (2015) Downloads
Working Paper: Cournot Competition and “Green” Innovation: An Inverted-U Relationship (2014) Downloads
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