Environmental Regulation and Choice of Innovation in Oligopoly

Hiroki Iwata

MPRA Paper from University Library of Munich, Germany

Abstract: This study investigates the effect of an environmental regulation on the innovation choice of firms in an oligopoly. Most existing studies on environmental regulations and innovations examine the optimal behavior of firms when one innovation project is feasible. In our model, firms are allowed to choose from multiple types of innovation projects. Our main contributions are that we derive the conditions under which environmentally friendly and cost reducing innovations are selected in Bertrand competition and we show how environmental regulation affects innovation choice.

Keywords: environmental regulation; innovation; the Porter hypothesis (search for similar items in EconPapers)
JEL-codes: D21 Q55 Q58 (search for similar items in EconPapers)
Date: 2016-03-25
New Economics Papers: this item is included in nep-com, nep-env, nep-ino, nep-law, nep-ppm and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:70280

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