Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/142603
Authors: 
Chowdhury, Prabal Roy
Year of Publication: 
2010
Series/Report no.: 
EERI Research Paper Series 42/2010
Abstract: 
We examine pollution-reducing R&D by a monopoly firm producing a dirty product. In a dynamic framework with hyperbolic discounting, we establish conditions under which the Porter hypothesis goes through, i.e. environmental regulation increases R&D, thus reducing pollution, as well as increasing firm profits. This is likely to hold whenever R&D costs are at an intermediate level, and the planning horizon of the firms is large.
Subjects: 
Porter hypothesis
abatement tax
R&D
hyperbolic discounting
JEL: 
H2
L1
L2
L5
Document Type: 
Working Paper

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