EconStor >
Universität Augsburg >
Institut für Volkswirtschaftslehre, Universität Augsburg >
Volkswirtschaftliche Diskussionsreihe, Universität Augsburg >

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10419/30809
  
Title:Strategic environmental policy and the accumulation of knowledge PDF Logo
Authors:Ziesemer, Thomas
Michaelis, Peter
Issue Date:2008
Series/Report no.:Volkswirtschaftliche Diskussionsreihe // Institut für Volkswirtschaftslehre der Universität Augsburg 301
Abstract:Recent political discussions about the possible advantages of first-mover behaviour in terms of environmental policy again called attention to the well-established controversy about the effects of environmental regulation on international competitiveness. Conventional theory claims that the trade-off between regulation and competitiveness will be negative while the revisionist view, also known as the Porter Hypothesis, argues for the opposite. Several previous attempts that analysed this quarrel by means of strategic trade game settings indeed support the former claim and conclude that, to increase a firm's competitiveness, ecological dumping is the most likely outcome in a Cournot duopoly configuration. However, these results were derived from one period games in which so-called innovation offsets are unlikely to occur. The present paper considers a two-period model that includes an intertemporally growing firm-level knowledge capital. In doing so the accumulation of knowledge is modelled in a unilateral and a bilateral variant. It is shown that for both scenarios in period 1 the domestic government will set a higher emission tax rate compared to its foreign counterpart. Furthermore, we identify conditions for which the domestic tax rate will be set above the Pigouvian level in period 1 in both model variants.
Subjects:first-mover behaviour
Porter Hypothesis
strategic environmental policy
environ-mental regulation
international competitiveness
JEL:F18
Q55
Q58
Document Type:Working Paper
Appears in Collections:Volkswirtschaftliche Diskussionsreihe, Universität Augsburg

Files in This Item:
File Description SizeFormat
577049399.PDF293.7 kBAdobe PDF
No. of Downloads: Counter Stats
Download bibliographical data as: BibTeX
Share on:http://hdl.handle.net/10419/30809

Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.