Technology transfer with transboundary pollution : a signalling approach
Canadian Journal of Economics
Wiley-Blackwell Publishing, Inc.
There are increasing complaints from the developing world that developed countries seem reluctant to transfer green technology, despite its benefits in helping to solve the climate problem. Identifying a signalling effect of technology transfer that was neglected by the previous literature, this paper offers a rationale for this reluctance in a North-South model with transboundary pollution. In a benchmark case with complete information, the North makes complete technology transfer, leading to a Pareto improvement. However, if the North's valuation on climate damage is its private information, the North does not completely transfer the technology in “almost all” of the equilibria.
Financillay supported by a start-up grant from Nanyang Technological University.
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Hong, F. (2014). Technology transfer with transboundary pollution: A signalling approach. Canadian Journal of Economics, 47(3), 953-980. doi: 10.1111/caje.12102