Environmental Technology Licensing Under Emission-Equivalent Environmental Taxes and Standards

Ming-Chung Chang*, 1, Jin-Li Hu2
1 Department of Banking and Finance, Kainan University, Taiwan
2 Institute of Business and Management, National Chiao Tung University, Taiwan

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© 2013 Chang and Hu

open-access license: This is an open access article distributed under the terms of the Creative Commons Attribution 4.0 International Public License (CC-BY 4.0), a copy of which is available at: https://creativecommons.org/licenses/by/4.0/legalcode. This license permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.

* Address correspondence to this author at the Department of Banking and Finance, Kainan University. No. 1 Kainan Rd., Luchu, Taoyuan County 33857, Taiwan; Tel: +886 3 3412500, Ext. 6212; Fax: +886 3 3412228; E-mail:changmc@mail.knu.edu.tw


We use a two-stage game with an outsider patentee and n homogeneous firms to study the effects of environmental taxes and standards under an equivalent emission on environmental technology licensing behavior. Counter to the intuition, a stricter environmental policy hinders technology licensing since a stricter environmental regulation weakens the licensee's payment ability. When the innovation size is small, there exists a preference inconsistency on the environmental instrument between the government and the patentee. The patent owner has a higher incentive to license under an environmental standard than under an emission tax with an equivalent emission amount.

Keywords: Environment instrument, licensed proportion, preference inconsistency.