R&D in Cleaner Technology and International Trade
AbstractWe consider a dynamic three-stage game played by two regulator-firm hierarchies to capture the scale and technological effects of opening markets to international trade. Each firm produces one good sold on the market. Firms can invest in R&D in order to lower their fixed emission/output ratio and are regulated with costly public funds. We take the context of sufficiently high market sizes and investment cost parameters. Opening markets to international trade yields more investment in R&D, more production and a lower emission ratio. When the market size is low enough and the investment cost parameter is high enough, pollution in common market is higher than in autarky. International trade reduces the social welfare.
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Bibliographic InfoPaper provided by Fondazione Eni Enrico Mattei in its series Working Papers with number 2004.17.
Date of creation: Jan 2004
Date of revision:
R&D; Cleaner technology; Common market; Social welfare;
Other versions of this item:
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
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