In this paper, we study the effects of absorptive capacity and R&D spillovers on cross-border pollution in a game played by two regulator-firm hierarchies. By means of a tax per-unit of pollution, a subsidy per-unit of original research and a subsidy per-unit of absorptive research, the regulators can reach the first-best outcome. We show that, in addition to free R&D spillovers and absorptive research, competition of firms on the common market help non-cooperating countries to better internalize transboundary pollution. More importantly, opening borders increase the per-unit emission-tax and decrease the per-unit original research subsidy. Thus, when the investment-cost parameters are sufficiently high, the international trade increases the original research, production. Consequently, the emission ratio is lower.
Transboundary pollution R&D spillovers absorptive capacity international trade.
Birincil Dil | İngilizce |
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Konular | Ekonomi |
Diğer ID | JA89YG46CA |
Bölüm | Araştırma Makalesi |
Yazarlar | |
Yayımlanma Tarihi | 1 Eylül 2014 |
Yayımlandığı Sayı | Yıl 2014 Cilt: 4 Sayı: 3 |