TITLE:
Emission Tax, R&D Subsidy and Green Innovation of Firms: An Analysis Based on Mixed Oligopoly Theory
AUTHORS:
Yalei Peng, Hongjin Xiang
KEYWORDS:
Emission Tax, R&D Subsidy, Green Innovation, Mixed Oligopoly Model
JOURNAL NAME:
American Journal of Industrial and Business Management,
Vol.13 No.5,
May
31,
2023
ABSTRACT: This
paper established a mixed oligopoly model to comprehensively compare the impact
of emission tax and R&D subsidy on the output decision-making and green
R&D decision-making of public and private firms. We find 1) with the
increase of emission tax, the output of the public firm increases while that of
the private firm decreases, but the total social output stays still, the public Firm’s R&D innovation has decreased,
while private firm’s R&D has increased. 2) The impact of emissions
tax on R&D investment is only related to the spillover index, not to the
size of the market. While the R&D subsidy is applied to the public firm,
and we find that 3) R&D subsidy has no effect on the optimal output of both
private and public firms. 4) With the increase of spillover effect, the output of the private firm decreases while that
of the public firm increases. 5) The study further shows that the public firm
dominates the overall green R&D level of society, while the
government only subsidizes the public firm in R&D.