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Trade liberalization, consumption externalities and the environment: a mixed duopoly approach

Author

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  • Shuichi Ohori

    () (Kyoto University)

Abstract

This paper studies the environmental tax and trade liberalization in a mixed duopolistic market wherein environmental damage is associated with consumption. In particular, we consider the effect of privatization on environmental tax and the effect of trade liberalization on the environment in an importing country. The results show that the optimal environmental tax in a mixed duopoly is higher than the Pigouvian level and the optimal tax in a pure duopoly. Furthermore, trade liberalization does not alter the environment.

Suggested Citation

  • Shuichi Ohori, 2006. "Trade liberalization, consumption externalities and the environment: a mixed duopoly approach," Economics Bulletin, AccessEcon, vol. 17(5), pages 1-9.
  • Handle: RePEc:ebl:ecbull:eb-06q00001
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    References listed on IDEAS

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    1. Walz, Uwe & Wellisch, Dietmar, 1997. "Is free trade in the interest of exporting countries when there is ecological dumping?," Journal of Public Economics, Elsevier, pages 275-291.
    2. Shuichi Ohori, 2006. "Optimal Environmental Tax and Level of Privatization in an International Duopoly," Journal of Regulatory Economics, Springer, vol. 29(2), pages 225-233, March.
    3. Cremer, Helmuth & Marchand, Maurice & Thisse, Jacques-Francois, 1989. "The Public Firm as an Instrument for Regulating an Oligopolistic Market," Oxford Economic Papers, Oxford University Press, pages 283-301.
    4. Damania, Richard & Fredriksson, Per G. & List, John A., 2003. "Trade liberalization, corruption, and environmental policy formation: theory and evidence," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 490-512, November.
    5. Randall Bluffstone & Theodore Panayotou, 2000. "Environmental Liability and Privatization in Central and Eastern Europe: Toward an Optimal Policy," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 335-352.
    6. Krutilla, Kerry, 1991. "Environmental regulation in an open economy," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 127-142, March.
    7. Kenneth Fjell & Debashis Pal, 1996. "A Mixed Oligopoly in the Presence of Foreign Private Firms," Canadian Journal of Economics, Canadian Economics Association, vol. 29(3), pages 737-743, August.
    8. Anderson, Glen D. & Zylicz, Tomasz, 1999. "The role of Polish environmental funds: Too generous or too restrictive?," Environment and Development Economics, Cambridge University Press, vol. 4(04), pages 413-448, October.
    9. Fjell, Kenneth & Heywood, John S, 2002. "Public Stackelberg Leadership in a Mixed Oligopoly with Foreign Firms," Australian Economic Papers, Wiley Blackwell, vol. 41(3), pages 267-281, September.
    10. Debashis Pal & Mark D. White, 1998. "Mixed Oligopoly, Privatization, and Strategic Trade Policy," Southern Economic Journal, Southern Economic Association, vol. 65(2), pages 264-281, October.
    11. Dietrich Earnhart, 2004. "Liability for Past Environmental Contamination and Privatization," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 97-122.
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    Citations

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    Cited by:

    1. Leonard Wang & Ya-Chin Wang & Lihong Zhao, 2009. "Trade liberalization, intra-industry trade and the environment: competition mode and the order of firms’ moves," International Review of Economics, Springer;Happiness Economics and Interpersonal Relations (HEIRS), pages 133-144.
    2. Susumu Cato, 2011. "Environmental policy in a mixed market: abatement subsidies and emission taxes," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 13(4), pages 283-301, December.
    3. Kato, Kazuhiko, 2010. "Partial privatization and unidirectional transboundary pollution," MPRA Paper 27155, University Library of Munich, Germany.
    4. repec:ebl:ecbull:v:17:y:2007:i:9:p:1-9 is not listed on IDEAS
    5. Tai-Liang Chen & Leonard Wang, 2010. "Trade liberalization and transboundary pollution in an international mixed duopoly," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 12(4), pages 187-200, December.
    6. Kazuhiko Kato, 2011. "Emission quota versus emission tax in a mixed duopoly," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 13(1), pages 43-63, January.
    7. Takeshi Iida & Kenji Takeuchi, 2011. "Does free trade promote environmental technology transfer?," Journal of Economics, Springer, pages 159-190.
    8. Leonard F.S. Wang & Tai-Liang Chen & Ya-Chin Wang, 2007. "Trade liberalization and environmental tax in differentiated oligopoly with consumption externalities," Economics Bulletin, AccessEcon, vol. 17(9), pages 1-9.
    9. Kazuhiko Kato, 2013. "Optimal degree of privatization and the environmental problem," Journal of Economics, Springer, pages 165-180.

    More about this item

    Keywords

    consumption externalities;

    JEL classification:

    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • L5 - Industrial Organization - - Regulation and Industrial Policy

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