Cournot Competition and "Green" Innovation: An Inverted-U Relationship
Luca Lambertini (),
Joanna Poyago-Theotoky and
Alessandro Tampieri ()
Working Paper series from Rimini Centre for Economic Analysis
We examine the relationship between competition and innovation in an industry where production is polluting and R&D aims to reduce emissions ("green" innovation). We present an n-firm oligopoly where firms compete in quantities and decide their investment in "green" R&D. When environmental taxation is exogenous, aggregate R&D investment always increases with the number of firms in the industry. Next we analyse the case where the emission tax is set endogenously by a regulator (committed or time-consistent) with the aim to maximize social welfare. We show that an inverted-U relationship exists between aggregate R&D and industry size under reasonable conditions, and is driven by the presence of R&D spillovers.
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Journal Article: Cournot competition and “green” innovation: An inverted-U relationship (2017)
Working Paper: Cournot Competition and "Green" Innovation: An Inverted-U Relationship (2015)
Working Paper: Cournot Competition and “Green” Innovation: An Inverted-U Relationship (2014)
Working Paper: Cournot Competition and "Green" Innovation: An Inverted-U Relationship (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:rim:rimwps:15-21
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