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Partial cross-ownership and strategic environmental policy

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

Abstract

This paper analyzes the effect that passive investment in rival firms has on the setting of cooperative and non-cooperative environmental taxes. We consider two firms located in different countries, one of which owns a stake in its rival. We show that partial cross-ownership affects the taxes set by the countries in the cooperative and non-cooperative cases. Depending on the stake that one firm has in its rival we show that cooperative taxes may he higher or lower than non-cooperative taxes. Moreover, for intermediate values of the stake, the non-cooperative tax is higher in one country and lower in the other than the cooperative tax.

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Bibliographic Info

Paper provided by Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I in its series IKERLANAK with number 2011-47.

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Date of creation: 2011
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Handle: RePEc:ehu:ikerla:201147

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Postal: Dpto. de Fundamentos del Análisis Económico I, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain
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Keywords: environmental taxes; international trade; local pollution; partial ownership;

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References

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Citations

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Cited by:
  1. 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.
  2. Fanti, Luciano & Gori, Luca, 2011. "Cross-ownership and stability in a Cournot duopoly," MPRA Paper 34574, University Library of Munich, Germany.
  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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