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The Impact of Foreign Ownership on the Choice between Emission Taxes and Emission Standards

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  • Jiunn‐Rong Chiou
  • Hung‐Yi Chen

Abstract

This research examines how foreign ownership affects the choice of two environmental policies. We find that a monopoly with foreign ownership produces more (less) and abates less (more) under emission standards than under emission taxes. As foreign ownership increases, with a small foreign ownership level the government is more likely to adopt the emission tax; and with a large foreign ownership level, if the abatement efficiency is high, then the government is also more likely to adopt the emission tax. We also examine the duopoly case in which a domestic firm with foreign ownership competes with another pure domestic firm.

Suggested Citation

  • Jiunn‐Rong Chiou & Hung‐Yi Chen, 2022. "The Impact of Foreign Ownership on the Choice between Emission Taxes and Emission Standards," The Economic Record, The Economic Society of Australia, vol. 98(323), pages 392-404, December.
    • Handle: RePEc:bla:ecorec:v:98:y:2022:i:323:p:392-404
    DOI: 10.1111/1475-4932.12702
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    References listed on IDEAS

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    1. Tsaur‐Chin Wu & Chin‐Ho Lin & Chia‐Jen Chang, 2024. "Carbon tariffs and environmental policy: Taxes versus standards," International Journal of Economic Theory, The International Society for Economic Theory, vol. 20(3), pages 269-302, September.

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