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Environmental regulation and technology transfers

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  • Takao Asano
  • Noriaki Matsushima

Abstract

This paper analyzes the situation in which a national government introduces environmental regulations. Within the framework of an international duopoly with environmental regulations, this paper shows that an environmental tax imposed by the government in the home country can induce a foreign firm with advanced abatement technology to license it to a domestic firm without this technology. Furthermore, when the domestic firm's production technology is less efficient than that of the foreign firm, the foreign firm may freely reveal its technology to the domestic firm. These improvements through the voluntary transfer of technology support the Porter hypothesis, which states that environmental regulations have positive impacts on innovation.

Suggested Citation

  • Takao Asano & Noriaki Matsushima, 2012. "Environmental regulation and technology transfers," ISER Discussion Paper 0862, Institute of Social and Economic Research, Osaka University.
  • Handle: RePEc:dpr:wpaper:0862
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    File URL: http://www.iser.osaka-u.ac.jp/library/dp/2012/DP0862.pdf
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    References listed on IDEAS

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    Cited by:

    1. repec:pal:jorsoc:v:68:y:2017:i:9:d:10.1057_s41274-017-0243-2 is not listed on IDEAS
    2. repec:eee:respol:v:46:y:2017:i:5:p:939-955 is not listed on IDEAS
    3. Naoto Aoyama & Emilson C.D. Silva, 2017. "Asymmetric Innovation Agreements under Environmental Regulation," CESifo Working Paper Series 6782, CESifo Group Munich.

    More about this item

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • F18 - International Economics - - Trade - - - Trade and Environment
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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