Firms` Strategic Decisions: Theoretical and Empirical Findings

Firms` Strategic Decisions: Theoretical and Empirical Findings

Volume: 2

Indexed in: Book Citation Index, Social Sciences & Humanities, EBSCO.

This is the second volume of the book series featuring empirical research conducted on business decision making policies of oligopolistic organizations. This volume brings together 11 chapters that ...
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Optimal Two-Part Tariff Licensing Strategies of Eco-Technology

Pp. 217-238 (22)

Seung-Leul Kim and Sang-Ho Lee

Abstract

This chapter examines the optimal two-part tariff licensing strategies of eco-technology by an eco-innovator toward polluting firms. In the presence of environmental regulation, we analyze the vertically related industries where polluting industry may purchase a license of pollution abatement technology from an eco-industry. We find that eco-innovator can construct the optimal two-part tariff licensing strategies to provide non-exclusive licensing contracts. However, the optimal strategies might yield welfare loss for some ranges of production cost and environmental regulation. Therefore, eco-innovator’s two-part tariff licensing strategies should be carefully restricted under the regulatory considerations on environmental policy and industrial policy.

Keywords:

Eco-innovator, eco-technology, environmental policy, environmental regulation, industrial policy, licensing contract model, polluting firms, pollution abatement technology, social welfare, two-part tariff licensing.

Affiliation:

Department of Economics, Chonnam National University, 77 Yongbong-Road, Bukgu, Gwangju, South Korea.