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Absorption of Advanced Technologies and the Environment

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  • Hichem, Ben M'rad

Abstract

This paper addresses the strategic behavior of developed and developing countries relative to emissions control within a closed model. Investment in absorptive capacity (AC) and tax on emissions are used to control the abatement efforts. Exogenous research and development (R&D) spillovers move freely from the developed country to the developing country. This allows the developing country to increase its AC. We find that the less developed country invests in AC only when the amount of exogenous spillovers is higher than a critical level. This positive investment in AC increases with respect to the technological level of the more developed country only when the exogenous spillovers are not excessive. Otherwise, the less developed country decreases its investment. We demonstrate that in most cases optimal emissions tax has an inverse relationship with the technological level of the developed country.

Suggested Citation

  • Hichem, Ben M'rad, 2015. "Absorption of Advanced Technologies and the Environment," Strategic Behavior and the Environment, now publishers, vol. 5(2), pages 157-174, October.
    • Handle: RePEc:now:jnlsbe:102.00000059
    DOI: 10.1561/102.00000059
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    More about this item

    Keywords

    Endogenous absorptive capacity; R&D; Rransboundary pollution; Abatement cost;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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