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Can Environmental Policy Encourage Technical Change? Emissions Taxes and R&D Investment in Polluting Firms.
- Source :
- Review of Financial Studies; Oct2022, Vol. 35 Issue 10, p4518-4560, 43p
- Publication Year :
- 2022
-
Abstract
- Higher country taxes on noxious manufacturing emissions lead to substantial increases in firms' R&D spending. The R&D response is entirely driven by those high-pollution firms most affected by emissions taxes. Pollution taxes increase the marginal value of R&D spending in polluting firms, even when this spending does not lead to new innovation. Pollution taxes have the strongest effect on R&D investment in sectors in which new invention is difficult to appropriate and outside knowledge is easier to acquire, suggesting an important reason dirty firms invest in R&D is to expand their capacity to absorb external knowledge and technical know-how. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 08939454
- Volume :
- 35
- Issue :
- 10
- Database :
- Complementary Index
- Journal :
- Review of Financial Studies
- Publication Type :
- Academic Journal
- Accession number :
- 159191134
- Full Text :
- https://doi.org/10.1093/rfs/hhac003