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Innovation stochastique et coût de la réglementation environnementale

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  • Kennedy, Peter

    (Département d’économique, Université de Victoria)

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    Abstract

    This paper illustrates that the cost of regulation can be negative when regulation-induced innovation has a stochastic element. There are two aspects to this finding. First, if the firm is risk neutral then regulation necessarily raises expected costs but costs can be lower ex post for some realizations of the innovation process. Whether this cost reduction is most likely for unfavourable or favourable realizations of the stochastic element depends on whether good fortune and research effort are substitutes or complements in the innovation process. The second aspect involves the implications of risk aversion and risk preference. In both cases it is possible for regulation to reduce costs on average because the regulation can induce the firm to undertake a level of research closer to that which minimizes expected cost. Cette étude démontre que le coût de la réglementation peut être négatif quand l’innovation induite par la réglementation a un élément stochastique. Ce résultat comporte deux aspects. Premièrement, si l’entreprise est neutre envers le risque, la réglementation fait nécessairement augmenter les coûts attendus, mais les coûts peuvent être inférieurs ex post pour certaines réalisations du processus d’innovation. Le fait que cette réduction de coûts sera plus probable pour des réalisations favorables ou défavorables de l’élément stochastique dépend de ce que la chance et l’effort de recherche sont des substituts ou des compléments du processus d’innovation. Le second aspect met en cause les implications de l’aversion au risque ou du goût pour le risque. Dans les deux cas, il est possible que la réglementation fasse diminuer les coûts en moyenne puisqu’elle peut inciter la firme à entreprendre un niveau de recherche plus proche de celui qui minimise le coût espéré.

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    Bibliographic Info

    Article provided by Société Canadienne de Science Economique in its journal L'Actualité économique.

    Volume (Year): 70 (1994)
    Issue (Month): 2 (juin)
    Pages: 199-209

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    Handle: RePEc:ris:actuec:v:70:y:1994:i:2:p:199-209

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    1. Christainsen, Gregory B & Haveman, Robert H, 1981. "Public Regulations and the Slowdown in Productivity Growth," American Economic Review, American Economic Association, vol. 71(2), pages 320-25, May.
    2. Dale W. Jorgenson & Peter J. Wilcoxen, 1990. "Environmental Regulation and U.S. Economic Growth," RAND Journal of Economics, The RAND Corporation, vol. 21(2), pages 314-340, Summer.
    3. Maloney, Michael T. & Yandle, Bruce, 1984. "Estimation of the cost of air pollution control regulation," Journal of Environmental Economics and Management, Elsevier, vol. 11(3), pages 244-263, September.
    4. J.B. Smith & W A. Sims, 1985. "The Impact of Pollution Charges on Productivity Growth in Canadian Brewing," RAND Journal of Economics, The RAND Corporation, vol. 16(3), pages 410-423, Autumn.
    5. Barbera, Anthony J. & McConnell, Virginia D., 1990. "The impact of environmental regulations on industry productivity: Direct and indirect effects," Journal of Environmental Economics and Management, Elsevier, vol. 18(1), pages 50-65, January.
    6. Gray, Wayne B, 1987. "The Cost of Regulation: OSHA, EPA and the Productivity Slowdown," American Economic Review, American Economic Association, vol. 77(5), pages 998-1006, December.
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    Cited by:
    1. Philippe Barla & Christos Constantatos & Markus Herrmann, 2008. "Environmental Regulation as a Coordination Device for the Introduction of a Green Product: The Porter’s Hypothesis Revisited," Discussion Paper Series 2008_04, Department of Economics, University of Macedonia, revised May 2008.
    2. Stefan Ambec & Paul Lanoie, 2007. "When and why does it pay to be green?," Cahiers de recherche 07-04, HEC Montréal, Institut d'économie appliquée.
    3. Stefan Ambec & Mark A. Cohen & Stewart Elgie & Paul Lanoie, 2013. "The Porter Hypothesis at 20: Can Environmental Regulation Enhance Innovation and Competitiveness?," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 7(1), pages 2-22, January.
    4. Ambec, Stefan & Barla, Philippe, 2005. "Can Environmental Regulations be Good for Business? an Assessment of the Porter Hypothesis," Cahiers de recherche 0505, GREEN.
    5. Massimiliano Mazzanti & Giovanni Marin & Susanna Mancinelli & Francesco Nicolli, 2014. "Carbon Dioxide reducing Environmental innovations, sector upstream/downstream integration and policy. Evidence from the EU," SEEDS Working Papers 1814, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Aug 2014.
    6. Charles Dufour & Paul Lanoie & Michel Patry, 1995. "Regulation and Productivity in the Quebec Manufacturing Sector," CIRANO Working Papers 95s-12, CIRANO.

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