Environmental Regulation and Technology Transfers

32 Pages Posted: 20 Dec 2012

See all articles by Takao Asano

Takao Asano

Okayama University - Economics; Osaka University - Institute of Social and Economic Research (ISER)

Noriaki Matsushima

Osaka University - Institute of Social and Economic Research (ISER)

Multiple version iconThere are 2 versions of this paper

Date Written: December 17, 2012

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.

Keywords: environmental regulation, technology transfer, international competition, duopoly

JEL Classification: Q56, F18, H23, L13

Suggested Citation

Asano, Takao and Matsushima, Noriaki, Environmental Regulation and Technology Transfers (December 17, 2012). ISER Discussion Paper No. 862, Available at SSRN: https://ssrn.com/abstract=2191811 or http://dx.doi.org/10.2139/ssrn.2191811

Takao Asano

Okayama University - Economics ( email )

Tsushima-naka 3-1-1
Okayama, Okayama 7008530
Japan

Osaka University - Institute of Social and Economic Research (ISER) ( email )

6-1 Mihogaoka
Ibaraki, Osaka 567-0047
Japan

Noriaki Matsushima (Contact Author)

Osaka University - Institute of Social and Economic Research (ISER) ( email )

6-1 Mihogaoka
Ibaraki, Osaka 567-0047
Japan

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