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Privatization and the Environment in a Mixed Duopoly with Pollution Abatement

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Author Info

  • Leonard F. S. Wang

    ()
    (Department of Applied Economics, National University of Kaoshiung)

  • Ya-chin Wang

    ()
    (Department of Finance and Banking, Kun Shan University)

  • Lihong Zhao

    ()
    (China Huanqiu Contracting & Engineering Corporation)

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    Abstract

    The purpose of this note is to re-examine whether privatization improves the environment or not in a mixed duopolistic model. In our model, both firms adopt pollution abatement technologies in response to the environmental tax imposed by the government. It is shown that privatization unambiguously reduces the pollution levels of firms. Namely, privatization does improve the environment. Moreover, by implementing partial-privatization policy, social welfare can be enhanced.

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    Bibliographic Info

    Article provided by AccessEcon in its journal Economics Bulletin.

    Volume (Year): 29 (2009)
    Issue (Month): 4 ()
    Pages: 3112-3119

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    Handle: RePEc:ebl:ecbull:eb-09-00590

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    Related research

    Keywords: Environmental Taxes; Mixed Oligopoly: Privatization;

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    References

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    1. R. Simpson, 1995. "Optimal pollution taxation in a Cournot duopoly," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 6(4), pages 359-369, December.
    2. Kazuhiko Kato, 2006. "Can Allowing to Trade Permits Enhance Welfare in Mixed Oligopoly?," Journal of Economics, Springer, vol. 88(3), pages 263-283, 09.
    3. Toshihiro Matsumura & Osamu Kanda, 2005. "Mixed Oligopoly at Free Entry Markets," Journal of Economics, Springer, vol. 84(1), pages 27-48, 02.
    4. Bradburd, Ralph, 1992. "Privatization of natural monopoly public enterprises : the regulation issue," Policy Research Working Paper Series 864, The World Bank.
    5. Matsumura, Toshihiro, 1998. "Partial privatization in mixed duopoly," Journal of Public Economics, Elsevier, vol. 70(3), pages 473-483, December.
    6. repec:ebl:ecbull:v:12:y:2008:i:19:p:1-10 is not listed on IDEAS
    7. Xiangkang Yin, 2003. "Corrective Taxes under Oligopoly with Inter-Firm Externalities," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 26(2), pages 269-277, October.
    8. Beladi, Hamid & Chao, Chi-Chur, 2006. "Does privatization improve the environment?," Economics Letters, Elsevier, vol. 93(3), pages 343-347, December.
    9. John Vickers & George Yarrow, 1991. "Economic Perspectives on Privatization," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 111-132, Spring.
    10. Kenji Fujiwara, 2007. "Partial Privatization in a Differentiated Mixed Oligopoly," Journal of Economics, Springer, vol. 92(1), pages 51-65, September.
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    Citations

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    Cited by:
    1. Rupayan Pal & Bibhas Saha, 2011. "Environmental outcomes in a model of mixed duopoly," University of East Anglia Applied and Financial Economics Working Paper Series 030, School of Economics, University of East Anglia, Norwich, UK..
    2. Kato, Kazuhiko, 2010. "Partial privatization and unidirectional transboundary pollution," MPRA Paper 27155, University Library of Munich, Germany.
    3. Kato, Kazuhiko, 2010. "Partial privatization and environmental policies," MPRA Paper 27630, University Library of Munich, Germany.
    4. Shuichi Ohori, 2012. "Environmental Tax and Public Ownership in Vertically Related Markets," Journal of Industry, Competition and Trade, Springer, vol. 12(2), pages 169-176, June.
    5. Kazuhiko Kato, 2013. "Optimal degree of privatization and the environmental problem," Journal of Economics, Springer, vol. 110(2), pages 165-180, October.

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