Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/313095 
Year of Publication: 
2025
Series/Report no.: 
Working Paper No. 462
Publisher: 
University of Zurich, Department of Economics, Zurich
Abstract: 
By affecting prices and thereby market shares of green and brown firms, product innovations and process innovations influence industry emissions even when they do not directly affect the emission intensity of the innovating firm. Using a differentiated two-stage duopoly, this paper therefore analyzes the effects of environmental policy on such innovations, and it asks how these effects differ from each other and from those of environmental innovations that directly reduce the emission intensity. The paper investigates the determinants of R&D investments, showing in particular that incentives for certain types of potentially beneficial innovations may be negative. Moreover, it analyzes how suitable policies can foster green innovation.
Subjects: 
Innovation
Environmental Policy
Imperfect Competition
JEL: 
Q55
L13
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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