Consumer's environmental awareness and the role of (green) entrepreneurship: lessons from environmental quality competition and R&D activities for environmental policy
- In the recent last years, in particular in the aftermath of the global financial and economic crisis, many countries initiated economic recovery plans with a major focus on stimulating green entrepreneurial activities to revive economic growth. Further, the recovery plans intend to improve a country's awareness for a direct orientation towards (strong) sustainability and green growth. Before discussing strategies towards green growth, in this paper we propose a novel framework to increase our understanding of the interplay of process R&D activities, the strategic price and environmental quality setting of heterogeneous entrepreneurs in a market where consumers feel up to paying for environmental quality improvement of a vertically differentiated good. In the paper we decompose an entrepreneur's incentive conducting process R&D in four parts. In particular we show that an entrepreneur's incentive of conducting own process R&D is reduced due to the existence of knowledge-spillovers.In the recent last years, in particular in the aftermath of the global financial and economic crisis, many countries initiated economic recovery plans with a major focus on stimulating green entrepreneurial activities to revive economic growth. Further, the recovery plans intend to improve a country's awareness for a direct orientation towards (strong) sustainability and green growth. Before discussing strategies towards green growth, in this paper we propose a novel framework to increase our understanding of the interplay of process R&D activities, the strategic price and environmental quality setting of heterogeneous entrepreneurs in a market where consumers feel up to paying for environmental quality improvement of a vertically differentiated good. In the paper we decompose an entrepreneur's incentive conducting process R&D in four parts. In particular we show that an entrepreneur's incentive of conducting own process R&D is reduced due to the existence of knowledge-spillovers. Moreover, due to the strategic complementarities, both in prices as well as in environmental quality, a strategic effect reinforces the negative consequences of the spillover-effect. We show that the externalities in the model require corrections based upon a mixture of fiscal policies and a process R&D subvention scheme establishing a first-best solution. We further thoroughly discuss the implementation of a second-best solution and derive environmental policy implications.…
Author: | Torben Klarl |
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URN: | urn:nbn:de:bvb:384-opus4-710960 |
Frontdoor URL | https://opus.bibliothek.uni-augsburg.de/opus4/71096 |
Series (Serial Number): | Volkswirtschaftliche Diskussionsreihe (321) |
Publisher: | Volkswirtschaftliches Institut, Universität Augsburg |
Place of publication: | Augsburg |
Type: | Working Paper |
Language: | English |
Year of first Publication: | 2013 |
Publishing Institution: | Universität Augsburg |
Release Date: | 2020/02/21 |
Tag: | JEL: Q55, Q58, O31, O33, D43, L13, L15 |
Pagenumber: | 47 |
Institutes: | Wirtschaftswissenschaftliche Fakultät |
Wirtschaftswissenschaftliche Fakultät / Institut für Volkswirtschaftslehre | |
Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
Journals: | Volkswirtschaftliche Diskussionsreihe |
Licence (German): | Deutsches Urheberrecht |