Transboundary pollution, R&D spillovers, absorptive capacity and international trade
In this paper, we consider a non-cooperative and symmetric three-stage game model composed by two regulator-firm hierarchies. By means of adequate emission taxes, original and absorptive research and development (R&D) subsidies we prove that regulators can reach the non-cooperative social optimum. In the presence of free R&D spillovers between countries, as well as the investment in absorptive research, the competition of firms on a common market helps non-cooperating countries to better internalize transboundary pollution. We find that in autarky and common market cases the investment in absorptive R&D leads to multiple non-cooperative equilibria, which may necessitate competing regulators to coordinate an equilibrium. Interestingly, opening markets to international trade increases the per-unit emission-tax and the per-unit original research subsidy. It causes a higher investment in original research and production, and a lower emission ratio.
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- Ben Youssef, Slim, 2009. "Transboundary Pollution and Absorptive Capacity," MPRA Paper 17158, University Library of Munich, Germany.
- Ben Youssef, Slim & Zaccour, Georges, 2009.
"Absorptive Capacity, R&D Spillovers, Emissions Taxes and R&D Subsidies,"
16984, University Library of Munich, Germany, revised Aug 2009.
- Ben Youssef, Slim & Zaccour, Georges, 2014. "Absorptive Capacity, R&D Spillovers, Emissions Taxes and R&D Subsidies," Strategic Behavior and the Environment, now publishers, vol. 4(1), pages 41-58, April.
- Joanna Poyago-Theotoky, 1999. "A Note on Endogenous Spillovers in a Non-Tournament R & D Duopoly," Review of Industrial Organization, Springer, vol. 15(3), pages 253-262, November.
- Slim Ben Youssef, 2009.
"Transboundary pollution, R&D spillovers and international trade,"
The Annals of Regional Science,
Springer, vol. 43(1), pages 235-250, March.
- Slim Ben Youssef, 2003. "Transboundary Pollution, R&D Spillovers and International Trade," Working Papers 2003.39, Fondazione Eni Enrico Mattei.
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