The Effects of Trade Liberalization on the Incentives of Environmental Investments

• Main Authors: YANG,DONG-YING, 楊東穎
• Other Authors: PENG,CHENG-HAU
• Format: Others
• Language: en_US
• Published: 2018
• Online Access: http://ndltd.ncl.edu.tw/handle/856d7z

碩士 === 輔仁大學 === 經濟學系碩士班 === 106 === In recent years, with the rise of consumers’ environmental awareness, firms are also committed to develop more environmental friendly products. This thesis introduces an intra-industry model with consumers' environmental awareness to explore whether trade liberalization will increase or decrease the firm’s environmental R&D incentives to improve their product environmental quality under Cournot and Bertrand competition. It is assumed that the domestic firm produces high-quality products and the foreign firm produces low-quality products. Under specific tariff: we find that regardless of the competition modes, the domestic firm will increase their environmental R&D incentive; but foreign firm will only increase the environmental R&D incentive when the marginal production cost is high regardless of the competition modes. Furthermore, under the ad valorem tariff policy, trade liberalization will increase both firms’ environmental R&D incentives. Under the quota policy: we show that regardless of the competition modes, if the marginal production cost is low (high), the domestic (foreign) firm will increase their environmental R&D incentive.