Jump to ContentJump to Main Navigation
Show Summary Details
More options …

The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Ludwig, Sandra / Schmitz, Hendrik

Ed. by Barigozzi, Francesca / Brunner, Johann / Fleck, Robert / Jürges, Hendrik / Mastrobuoni, Giovanni / Mendola, Mariapia / Requate, Till / de Vries, Frans / Wenzel, Tobias


IMPACT FACTOR 2018: 0.520
5-year IMPACT FACTOR: 0.556

CiteScore 2018: 0.54

SCImago Journal Rank (SJR) 2018: 0.356
Source Normalized Impact per Paper (SNIP) 2018: 0.394

Online
ISSN
1935-1682
See all formats and pricing
More options …
Ahead of print

Issues

Volume 20 (2020)

Volume 6 (2006)

Volume 4 (2004)

Volume 2 (2002)

Volume 1 (2001)

Investment in Green Technology and Entry Deterrence

John C. Strandholm
  • Johnson College of Business and Economics, University of South Carolina Upstate, 160 East St John St, Spartanburg, SC 29306, USA
  • Email
  • Other articles by this author:
  • De Gruyter OnlineGoogle Scholar
/ Ana Espínola-Arredondo
  • Corresponding author
  • School of Economic Sciences, Washington State University, 111C Hulbert Hall, Pullman, WA 99164, USA
  • Email
  • Other articles by this author:
  • De Gruyter OnlineGoogle Scholar
Published Online: 2020-02-01 | DOI: https://doi.org/10.1515/bejeap-2018-0355

Abstract

This paper analyzes an entry-deterrence model in which the incumbent decides whether to invest in research and development (R&D) that promotes clean technology. We consider the case in which the entrant could benefit from a technology spillover and analyze the conditions that facilitate the incumbent’s entry-deterrence behavior. We show that higher levels of the spillover make entry more attractive compared to a standard entry game. In addition, regulator and incumbent prefer entry when the spillover from clean technology is sufficiently high and the cost of investing in R&D is relatively low. However, preferences are misaligned when the spillover and cost of R&D are low.

Keywords: entry deterrence; emission fee; research and development; spillover

JEL Classification: H23; L12; O32; Q58

References

  • Adelman, D. E., and K. H. Engel. 2008. “Reorienting State Climate Change Policies to Induce Technological Change.” Arizona Law Review 50 (835): 835–78.Google Scholar

  • Damania, D. 1996. “Pollution Taxes and Pollution Abatement in an Oligopoly Supergame.” Journal of Environmental Economics and Management 30: 323–36.CrossrefGoogle Scholar

  • D’Aspremont, C., and A. Jacquemin. 1988. “Cooperative and Noncooperative R&D in Duopoly with Spillovers.” The American Economic Review 78 (5): 1133–37.Google Scholar

  • Datta, A., and E. Somanathan. 2016. “Climate Police and Innovation in the Absence of Commitment.” Journal of the Association of Environmental and Resource Economists 3 (4): 917–55.CrossrefGoogle Scholar

  • Dean, T. J., and R. L. Brown. 1995. “Pollution Regulation as a Barrier to New Firm Entry: Initial Evidence and Implications for Future Research.” The Academy of Management Journal 38 (1): 288–303.Google Scholar

  • Espínola-Arredondo, A., and F. Muñoz-García. 2013. “When Does Environmental Regulation Facilitate Entry-Deterring Practices.” Journal of Environmental Economics and Management 65: 133–52.Web of ScienceCrossrefGoogle Scholar

  • Espínola-Arredondo, A., F. Muñoz-García, and J. Bayham. 2014. “The Entry-Deterring Effects of Inflexible Regulation.” Canadian Journal of Economics 47 (1): 298–324.CrossrefWeb of ScienceGoogle Scholar

  • Espínola-Arredondo, A., F. Muñoz-García, and B. Liu. 2019. “Strategic Emission Fees: Using Green Technology to Deter Entry.” Journal of Industry, Competition and Trade 19 (2): 313–49.CrossrefWeb of ScienceGoogle Scholar

  • Folger, Peter. 2018. “Carbon Capture and Sequestration (CCS) in the United States.” Congressional Research Service R44902: 1–27.Google Scholar

  • Jaffe, A. B., M. Trajtenberg, and M. S. Fogarty. 2000. “Knowledge Spillovers and Patent Citations: Evidence from a Survey of Inventors.” American Economic Review 90 (2): 215–18.CrossrefGoogle Scholar

  • Millimet, D. L., S. Roy, and A. Sengupta. 2009. “Environmental Regulations and Economic Activity: Influence of Market Structure.” Annual Review of Resource Economics 1: 99–117.Web of ScienceCrossrefGoogle Scholar

  • Miyagiwa, K., and Y. Ohno. 2002. “Uncertainty, Spillovers, and Cooperative R&D.” International Journal of Industrial Organization 20: 855–76.CrossrefGoogle Scholar

  • Møen, Jarle. 2005. “Is Mobility of Technical Personnel a Source of R&D Spillovers?” Journal of Labor Economics 23 (1): 81–114.CrossrefGoogle Scholar

  • Ouchida, Y., and D. Goto. 2014. “Do Emission Subsidies Reduce Emission? In the Context of Environmental R&D Organization.” Economic Modeling 36: 511–16.CrossrefGoogle Scholar

  • Ouchida, Y., and D. Goto. 2016. “Environmental Research Joint Ventures and Time-Consistent Emission Tax: Endogenous Choice of R&D Formation.” Economic Modeling 55: 179–88.CrossrefGoogle Scholar

  • Petrakis, E., and A. Xepapadeas. 2001. “To Commit or Not to Commit: Environmental Policy in Imperfectly Competitive Markets.” Department of Economics, University of Crete, Working Paper 01-10.Google Scholar

  • Poyago-Theotoky, J. A. 2007. “The Organization of R&D and Environmental Policy.” Journal of Economic Behavior & Organization 62: 63–75.CrossrefWeb of ScienceGoogle Scholar

  • Poyago-Theotoky, J. A. 2010. “Corrigendum to ‘The Organization of R&D and Environmental Policy’ [J. Econ. Behav. Org. 62 (2007) 63–75].” Journal of Economic Behavior & Organization 76 (2): 449.CrossrefGoogle Scholar

  • Qi, S. 2019. “Advertising, Industry Innovation, and Entry Deterrence.” International Journal of Industrial Organization 65: 30–50.Web of ScienceCrossrefGoogle Scholar

  • Schoonbeek, L., and F. P. de Vries. 2009. “Environmental Taxes and Industry Monopolization.” Journal of Regulatory Economics 36: 94–106.CrossrefWeb of ScienceGoogle Scholar

  • Schwägerl, C. 2017, November 14. “In Drive to Cut Emissions, Germany Confronts Its Car Culture.” Yale Environment 360. Retrieved from https://e360.yale.edu/features/in-drive-to-cut-emissions-germany-confronts-its-car-culture.

  • Selten, R. 1978. “The Chain Store Paradox.” Theory and Decision 9 (2): 127–59.CrossrefGoogle Scholar

  • Sonal, Patel. 2017, August 1. “Capturing Carbon and Seizing Innovation: Petra Nova Is POWER’s Plant of the Year.” Power. Retrieved from https://www.powermag.com/capturing-carbon-and-seizing-innovation-petra-nova-is-powers-plant-of-the-year/?printmode=1.

  • Spence, A. M. 1977. “Entry, Capacity, Investment and Oligopolistic Pricing.” The Bell Journal of Economics 8 (2): 534–44.CrossrefGoogle Scholar

  • Stepanova, A., and A. Tesoriere. 2011. “R&D With Spillovers: Monopoly Versus Noncooperative and Cooperative Duopoly.” The Manchester School 79 (1): 125–44.CrossrefGoogle Scholar

  • Strandholm, J., A. Espínola-Arredondo, and F. Muñoz-García. 2018. “Regulation, Free-Riding Incentives, and R&D Investment with Spillovers.” Resource and Energy Economics 53: 133–46.Web of ScienceCrossrefGoogle Scholar

  • Tesoriere, A. 2015. “Competing R&D Joint Ventures in Cournot Oligopoly with Spillovers.” Journal of Economics 115 (3): 231–56.CrossrefWeb of ScienceGoogle Scholar

About the article

Published Online: 2020-02-01


Citation Information: The B.E. Journal of Economic Analysis & Policy, 20180355, ISSN (Online) 1935-1682, DOI: https://doi.org/10.1515/bejeap-2018-0355.

Export Citation

© 2020 Walter de Gruyter GmbH, Berlin/Boston.Get Permission

Comments (0)

Please log in or register to comment.
Log in