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The downstream firm's decision over R&D for energy-saving

Author

Listed:
  • Wang, Chia-Chi
  • Wang, Ying-Da
  • Chiou, Jiunn-Rong

Abstract

Although energy saving for a firm is very important, the R&D literature has rarely discussed this issue. This paper provides a vertically-related model to analyze how conducting energy-saving R&D affects the upstream firm's pricing decision and downstream firm's energy-saving and output decisions. We show that an increase in energy price may induce the downstream firm to purchase more energy, but less efficient R&D may not induce the downstream firm to purchase more energy. Moreover, more efficient R&D may not increase the energy price under the upstream monopoly case. Finally, social welfare may not improve when the upstream market becomes more competitive.

Suggested Citation

  • Wang, Chia-Chi & Wang, Ying-Da & Chiou, Jiunn-Rong, 2024. "The downstream firm's decision over R&D for energy-saving," Energy Economics, Elsevier, vol. 140(C).
    • Handle: RePEc:eee:eneeco:v:140:y:2024:i:c:s0140988324006984
    DOI: 10.1016/j.eneco.2024.107990
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    More about this item

    Keywords

    R&D; Energy saving; Vertically-related market;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • M11 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Production Management

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