"Technology Transfer and the South's Participation in an International Environmental Agreement" forthcoming in Review of International Economics (with Larry Qiu)

  We develop a North-South model of international trade and transboundary pollution to analyze the relationship between environmental technology transfer and the South's incentive to join an international environmental agreement (IEA). We find necessary and sufficient conditions under which technology transfer will increase the South's incentive to join the IEA. We also find necessary and sufficient conditions under which the South's participation in the IEA will increase the market incentive for technology transfer. Results have clear policy implications for (i) the sequence of technology transfer and the South's IEA membership and (ii) the legitimacy of the South's subsidies for technology transfer.

"Strategic Trade Policy Aspects of the Kyoto Protocol: Extracting Oil Rents" , Asian and Pacific Journal Accounting and Economics,  v14, December 2007, 219-234

  The paper has identified a unique aspect of the Kyoto Protocol from the perspective of strategic trade and environmental policy. While investigating the horizontal “profit-shifting”, vertical “rent-extracting”, and “collusion-facilitating” effects, it focuses on the strategic behaviour of the OPEC and the potential role of the Protocol in extracting oil rent back from the OPEC.  It is also shown that even in the absence of environmental considerations, those member countries that export oil could benefit from the Kyoto Protocol.  These results shall strengthen the argument for the sustainability of the Kyoto Protocol in the long run.

"A Theory of Mutual Migration of Polluting Firms" , Canadian Journal of  Economics, v38(2), May 2005,  (with Laixun Zhao and Yoshiko Onuma)

    Suppose that governments care about their tax revenue and local firms have some say in environmental regulations. Then, the level of employment and environmental compliance may be negotiated.  We find that firms located in different countries can improve their threat-point payoffs by mutual migration. This in turn affects the negotiated output/employment and environmental regulations, which causes profits to increase if the firm’s threat-point payoff is higher than that of the local government. The model predicts that pollution-intensive firms or firms with highly inelastic demands are more likely to move out.  Increases in the government’s valuation of the environment, or in the degree of globalization also cause mutual migration of dirty firms. The effect of a government caring about consumer surplus leads to a lower pollution tax, reducing firms’ incentives to move out.