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Partial cross-ownership and strategic environmental policy

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  • Bárcena-Ruiz, Juan Carlos
  • Campo, María Luz

Abstract

This paper analyzes the effect of passive investment in rival firms on the setting of cooperative and non-cooperative environmental taxes. We consider two firms located in different countries, with each firm owning the same percentage of the stock of its rival. We show that bilateral partial cross-ownership affects the taxes set by the countries in the cooperative and non-cooperative cases. When the stake that one firm has in its rival is great enough and environmental spillovers are low enough, cooperative taxes are lower than non-cooperative taxes. For the remaining values of parameters the opposite result is obtained.

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Bibliographic Info

Article provided by Elsevier in its journal Resource and Energy Economics.

Volume (Year): 34 (2012)
Issue (Month): 2 ()
Pages: 198-210

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Handle: RePEc:eee:resene:v:34:y:2012:i:2:p:198-210

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Web page: http://www.elsevier.com/locate/inca/505569

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Keywords: Environmental taxes; International trade; Global pollution; Partial ownership;

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Cited by:
  1. Fanti, Luciano & Gori, Luca, 2011. "Cross-ownership and stability in a Cournot duopoly," MPRA Paper 34574, University Library of Munich, Germany.
  2. Luciano Fanti, 2011. "Welfare effects of cross-ownership in a unionised duopoly," Discussion Papers 2011/125, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.
  3. Luciano Fanti, 2011. "Cross-participated firms and welfare," Discussion Papers 2011/127, Dipartimento di Economia e Management (DEM), University of Pisa, Pisa, Italy.

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