- Title
- Environmental Preferences and Technological Choices : Is Market Competition Clean or Dirty?
- Author(s)
- Philippe Aghion Philippe Aghion (Collège de France)
- Roland Bénabou Roland Bénabou (Princeton University)
- Ralf Martin Ralf Martin (Imperial College London)
- Alexandra Roulet Alexandra Roulet (INSEAD)
- Abstract
- We investigate the effects of consumers' environmental concerns and market competition on firms' decisions to innovate in "clean" technologies. Agents care about their consumption and environmental footprint; firms pursue greener products to soften price competition. Acting as complements, these forces determine R&D, pollution, and welfare. We test the theory using panel data on patents by 8,562 automobile-sector firms in 41 countries, environmental willingness-to pay, and competition. As predicted, exposure to prosocial attitudes fosters clean innovation, all the more so where competition is strong. Plausible increases in both together can spur it as much as a large fuel-price increase.
- Creation Date
- 2021-01
- Section URL ID
- Paper Number
- 2021-64
- URL
- https://scholar.princeton.edu/sites/default/files/rbenabou/files/abmr_final_final_final.pdf
- File Function
- Jel
- D21, D22, D62, D64, H23, O30, O31
- Keyword(s)
- climate change, Competition, Environment, Innovation, Patents, Social Responsibility
- Suppress
- false
- Series
- 13