Regulatory attitudes and environmental innovation in a model combining internal and external R&D

Heyes, Anthony and Kapur, Sandeep (2011) Regulatory attitudes and environmental innovation in a model combining internal and external R&D. Journal of Environmental Economics and Management, 61 (3). pp. 327-340. ISSN 00950696

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Abstract

The extent to which environmental regulatory institutions are either ‘green’ or ‘brown’ impacts not just the intensity of regulation at any moment, but also the incentives for the development of new pollution-control technologies. We set up a strategic model of R&D in which a polluter can deploy technologies developed in-house, or license technologies developed by specialist outsiders (an ‘eco-industry’). Polluters exert R&D effort and may even develop redundant technologies to improve the terms on which they procure technology from outside. We find that, while regulatory bias has an ambiguous impact on the best-available technology, strategic delegation to systematically biased regulators can improve social welfare.

Item Type: Article
Keywords: Environmental R&D; Abatement technology; Strategic delegation; Eco-industry
Schools and Departments: School of Business, Management and Economics > Economics
Subjects: H Social Sciences > HB Economic theory. Demography
Depositing User: Catrina Hey
Date Deposited: 11 Sep 2013 14:26
Last Modified: 11 Sep 2013 14:26
URI: http://sro.sussex.ac.uk/id/eprint/46141
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