Transboundary Pollution and Absorptive Capacity
AbstractThe impact of the investment in absorptive capacity on transboundary pollution is studied by considering two countries each of them regulating a firm. Firms can invest in original research and in absorptive research to lower their pollution intensity. The absorptive research enables a firm to capture part of the original research made by the other one. We show that by means of adequate emission taxes, original and absorptive R&D subsidies, non-cooperating regulators can reach the social optimum. Interestingly, we show that the investment in absorptive research enables non-cooperating regulators to better internalize transboundary pollution. The higher is the ability parameter of absorption, the greater is the proportion of transboundary pollution internalized. Therefore, it is recommended for the international community to make the patent laws more flexible and enabling learning from the research made by others more interesting.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 17158.
Date of creation: 05 Sep 2009
Date of revision:
Transboundary Pollution; Original Research; Absorptive Research; Internalization; Social Optimum.;
Find related papers by JEL classification:
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-09-11 (All new papers)
- NEP-ENE-2009-09-11 (Energy Economics)
- NEP-ENV-2009-09-11 (Environmental Economics)
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