Journal
ENVIRONMENTAL & RESOURCE ECONOMICS
Volume 20, Issue 2, Pages 129-146Publisher
KLUWER ACADEMIC PUBL
DOI: 10.1023/A:1012637212545
Keywords
collaboration; coordination; Cournot competition; pollution abatement; R&D joint venture; strategic effect
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The effect of environmental policy depends crucially on the strategic behavior of firms. Firms can undertake pollution abatement innovation cooperatively through environmental R&D joint ventures (RJVs). Environmental RJVs have not only environmental but also economic impacts. Three types of environmental RJV are discussed in this paper: R&D cartelization in which firms choose R&D efforts to maximize the joint profit, RJV competition in which firms share the R&D fruits to maximize their own profits, and RJV cartelization in which firms share R&D fruits and maximize the joint profit. An R&D cartelization minimizes output quantities, maximizes the total emission, and minimizes the social surplus. An RJV cartelization with a sufficiently high spillover coefficient maximizes R&D efforts, minimizes the total emission, and maximizes the social surplus.
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