Environmental Policies and Mergers’ Externalities
AbstractA Cournot oligopolistic setting model of trade is characterized by local and foreign firms competing in the presence of pollution quota and tax. Local firms are foreign-owned (FDI) and repatriate their profits. First, we analyze the impact on welfare given by the merger of the local firms, as a response to external firms’ competition and pollution abatement costs. Second, when merger is welfare decreasing, we study the best response of the government in order to compensate this negative externality. Finally, we compare the pollution quota and tax in order to determine their efficiency as a policy instrument.
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Bibliographic InfoArticle provided by in its journal Economia Mexicana NUEVA EPOCA.
Volume (Year): XVI (2007)
Issue (Month): 1 (January-June)
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Find related papers by JEL classification:
- F2 - International Economics - - International Factor Movements and International Business
- H2 - Public Economics - - Taxation, Subsidies, and Revenue
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- N5 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries
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