Environmental R&D and privatization in a mixed duopoly market

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  • Mingqing Xing
    School of Economics and Management Weifang University Weifang PR China
  • Tingting Tan
    Business School Huzhou University Huzhou PR China
  • Xia Wang
    School of chemical and environmental engineering Weifang University Weifang PR China
  • Linlin Liu
    School of Economics and Management Weifang University Weifang PR China

説明

<jats:p>The study examines strategic environmental research and development (ER&D) under environmental tax in a mixed duopoly and further analyzes the impact of privatization on it. We show that the environmental tax may not necessarily promote the private (or public) firm's ER&D, and the relative ER&D performance between firms depends on the public firm's environmental attitudes and the tax rate. When the public firm cares much for environment, it can be used as an instrument to correct the private firm's underinvestment (or overinvestment) in ER&D. Moreover, privatization can (cannot) raise both firms' ER&D simultaneously if the tax rate is high (low).</jats:p>

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