@article{Lambertini:207397, recid = {207397}, author = {Lambertini, Luca and Poyago-Theotoky, Joanna and Tampieri, Alessandro}, title = {Cournot Competition and "Green" Innovation: An Inverted-U Relationship}, address = {2015-08-05}, number = {824-2016-54937}, series = {CCSD}, pages = {24}, month = {Aug}, year = {2015}, abstract = {We examine the relationship between competition and innovation in an industry where production is polluting and R&D aims to reduce emissions ("green" innovation). We present an n-firm oligopoly where firms compete in quantities and decide their investment in "green" R&D. When environmental taxation is exogenous, aggregate R&D investment always increases with the number of firms in the industry. Next we analyse the case where the emission tax is set endogenously by a regulator (committed or time-consistent) with the aim to maximise social welfare. We show that an inverted-U relationship exists between aggregate R&D and industry size under reasonable conditions, and is driven by the presence of R&D spillovers.}, url = {http://ageconsearch.umn.edu/record/207397}, doi = {https://doi.org/10.22004/ag.econ.207397}, }