Abstract
The effect of environmental policy depends crucially on the strategic behavior of firms. Firms can undertake pollution abatement innovation cooperatively through environmental R&D joint ventures (RJVs). Environmental RJVs have not only environmental but also economic impacts. Three types of environmental RJV are discussed in this paper: R&D cartelization in which firms choose R&D efforts to maximize the joint profit, RJV competition in which firms share the R&D fruits to maximize their own profits, and RJV cartelization in which firms share R&D fruits and maximize the joint profit. An R&D cartelization minimizes output quantities, maximizes the total emission, and minimizes the social surplus. An RJV cartelization with a sufficiently high spillover coefficient maximizes R&D efforts, minimizes the total emission, and maximizes the social surplus.
| Original language | English |
|---|---|
| Pages (from-to) | 129-146 |
| Number of pages | 18 |
| Journal | Environmental and Resource Economics |
| Volume | 20 |
| Issue number | 2 |
| DOIs | |
| State | Published - 2001 |
Keywords
- Collaboration
- Coordination
- Cournot competition
- Pollution abatement
- R&D joint venture
- Strategic effect