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Environmental technology transfer in a Cournot duopoly: the case of fixed-fee licensing

Author

Listed:
  • Akira Miyaoka

    (Institute of Social and Economic Research, Osaka University)

Abstract

This study considers a Cournot duopoly market in which a clean firm can transfer its less polluting technology to a dirty firm through a fixed-fee licensing contract. We analyze the impacts of emissions tax on the incentives of firms to transfer technology and the firms' total pollution level, and examine the properties of the optimal emissions tax policy. We show that a higher emissions tax weakens the incentives of technology transfer and that this can lead to a perverse increase in the total pollution level. We also find that as the degree of the initial technology gap between firms widens, the optimal emissions tax can (weakly) decrease, which is contrary to the result when a licensing option is not available.

Suggested Citation

  • Akira Miyaoka, 2014. "Environmental technology transfer in a Cournot duopoly: the case of fixed-fee licensing," Economics Bulletin, AccessEcon, vol. 34(4), pages 2253-2266.
    • Handle: RePEc:ebl:ecbull:eb-14-00106
    as

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    References listed on IDEAS

    as
    1. Henry Wang, X., 2002. "Fee versus royalty licensing in a differentiated Cournot duopoly," Journal of Economics and Business, Elsevier, vol. 54(2), pages 253-266.
    2. Takeshi Iida & Kenji Takeuchi, 2011. "Does free trade promote environmental technology transfer?," Journal of Economics, Springer, vol. 104(2), pages 159-190, October.
    3. Rockett, Katharine, 1990. "The quality of licensed technology," International Journal of Industrial Organization, Elsevier, vol. 8(4), pages 559-574, December.
    4. Takeshi Iida & Kenji Takeuchi, 2010. "Environmental Technology Transfer via Free Trade," Economics Bulletin, AccessEcon, vol. 30(2), pages 948-960.
    5. Indrani Roy Chowdhury, 2008. "Joint Ventures, Pollution And Environmental Policy," Bulletin of Economic Research, Wiley Blackwell, vol. 60(1), pages 97-121, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Technology transfer; Cournot duopoly; Pollution; Emissions tax;
    All these keywords.

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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