Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/154881
Authors: 
Carraro, Carlo
Soubeyran, Antoine
Year of Publication: 
1998
Series/Report no.: 
Nota di Lavoro, Fondazione Eni Enrico Mattei 23.1998
Abstract: 
In this paper, the reaction of firms to the introduction of environmental charges in a given industry is analysed. Firms may decide either to relocate their plants abroad or to adopt a new environmental-friendly technology. The latter can be either developed by investing in R&D or obtained by buying a licence. We show that, even if domestic firms share the same initial technology, at the equilibrium they make different choices in response to the same environmental policy. Some firms decide to co-operate in carrying out environmental R&D, other firms re-locate their plants abroad, and a third group decides to innovate through imitation. The size of the three groups can be affected by the government's industrial, trade and environmental policies.
Subjects: 
Endogenous coalition formation
Environmental tax
R&D co-operation
Non co-operative game theory
JEL: 
C72
H32
H42
Document Type: 
Working Paper

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