Research On Firm’s R&D Investment For Abatement Technology Based On Spillover

Environmental pollution has caused a great loss to the economy.The important means of pollution control is to use more efficient abatement technology.And the enthusiasm of the firm’s investment of technology is greatly influenced by the environmental policy.It is worthy to study that the government should formulate a suitable pollution control policy to promote the R&D of abatement technology,to reduce pollution emissions,and to increase social welfare under different conditions.This paper develops a Cournot model combined with the theory of abatement technology spillover,firm’s aggregate emission,the initial allocation of emission rights,market structure and other factors,to discuss the impact of these factors on the firm’s R&D of abatement technology.Research shows that: firstly,when the technology spillover is small,the cooperation of firm’s abatement R&D will have adverse effects on the social welfare,and when the spillover is large,“free rider effect” will appear in firm’s noncooperation R&D.Therefore,when spillover is small,the noncooperative R&D is preferred,and vice versa.Secondly,when the more competitive market structure is,more preferred noncooperative R&D is.Thirdly,we divide the abatement R&D investment into original and absorbing investment.When the spillover is smaller,firm chooses original R&D investment;and when the spillover is large,absorbing investment will increase much faster than the original R&D investment.Finally,emission rights price increase will reduce the manufacturer’s profit,but to a extent can promote firm’ abatement R&D investment.In the summary of the theoretical conclusions of the thesis,this paper proposes several suggestions for the government environment policy: protect firms’ abatement technology intellectual property rights,but to a extent,encourage technology communication between firms.When the market is less competitive,encourage communication between firms in abatement technology in order to reduce the cost of duplication.