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R&D in Cleaner Technology and International Trade

Author

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  • Slim Ben Youssef

    (LAREQUAD and Faculté des Sciences Economiques et de Gestion de Mahdia)

Abstract

We 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.

Suggested Citation

  • Slim Ben Youssef, 2004. "R&D in Cleaner Technology and International Trade," Working Papers 2004.17, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2004.17
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    Keywords

    R&D; Cleaner technology; Common market; Social welfare;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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