IDEAS home Printed from https://ideas.repec.org/a/ebl/ecbull/eb-07q00006.html
   My bibliography  Save this article

Trade liberalization and environmental tax in differentiated oligopoly with consumption externalities

Author

Listed:
  • Leonard F.S. Wang

    (Department of Applied Economics, National University of Kaohsiung)

  • Tai-Liang Chen

    (Institute of Economics and Management, National University of Kaohsiung)

  • Ya-Chin Wang

    (Department of Finance and Banking, Kun Shan University)

Abstract

This paper investigates the environment tax and trade liberalization with different market structures (pure oligopoly or mixed oligopoly) juxtaposing the substitutability of the goods (homogenous goods and differentiated goods), wherein environmental damage is associated with consumption. It shows that the environmental tax in mixed oligopoly is higher than in pure oligopoly irrespective of the properties of goods. In addition, it demonstrates that when the domestic market increases its openings, the tariff reduction does not always bring positive effects on the environment in mixed oligopoly but, in pure oligopoly with homogeneous goods, the tariff reduction is bad for the environment.

Suggested Citation

  • 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.
    • Handle: RePEc:ebl:ecbull:eb-07q00006
    as

    Download full text from publisher

    File URL: http://www.accessecon.com/pubs/EB/2007/Volume17/EB-07Q00006A.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Mark R Metcalfe & John C Beghin, 2015. "Piecemeal Reform of Trade and Environmental Policy When Consumption Also Pollutes," Economics Bulletin, AccessEcon, vol. 35(4), pages 2282-2287.
    2. Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
    3. repec:ebl:ecbull:v:17:y:2006:i:5:p:1-9 is not listed on IDEAS
    4. Kenneth Fjell & John S. Heywood, 2002. "Public Stackelberg Leadership in a Mixed Oligopoly with Foreign Firms," Australian Economic Papers, Wiley Blackwell, vol. 41(3), pages 267-281, September.
    5. 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.
    6. Hackner, Jonas, 2000. "A Note on Price and Quantity Competition in Differentiated Oligopolies," Journal of Economic Theory, Elsevier, vol. 93(2), pages 233-239, August.
    7. Shuichi Ohori, 2006. "Trade liberalization, consumption externalities and the environment: a mixed duopoly approach," Economics Bulletin, AccessEcon, vol. 17(5), pages 1-9.
    8. Walz, Uwe & Wellisch, Dietmar, 1997. "Is free trade in the interest of exporting countries when there is ecological dumping?," Journal of Public Economics, Elsevier, vol. 66(2), pages 275-291, November.
    9. Krutilla, Kerry, 1991. "Environmental regulation in an open economy," Journal of Environmental Economics and Management, Elsevier, vol. 20(2), pages 127-142, March.
    10. 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.
    11. repec:bla:ausecp:v:41:y:2002:i:3:p:267-81 is not listed on IDEAS
    12. Debashis Pal & Mark D. White, 1998. "Mixed Oligopoly, Privatization, and Strategic Trade Policy," Southern Economic Journal, John Wiley & Sons, vol. 65(2), pages 264-281, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    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), vol. 56(2), pages 133-144, June.
    2. Mark R Metcalfe & John C Beghin, 2015. "Piecemeal Reform of Trade and Environmental Policy When Consumption Also Pollutes," Economics Bulletin, AccessEcon, vol. 35(4), pages 2282-2287.
    3. Chen, Tai-Liang & Yang, Mingjie & Zou, Yuxiang, 2025. "Carbon emission control, tariff-carbon tax reform and intersectoral migration in the presence of international capital inflows," The North American Journal of Economics and Finance, Elsevier, vol. 78(C).
    4. Liu, Chih-Chen & Mukherjee, Arijit & Wang, Leonard F.S., 2015. "Horizontal merger under strategic tax policy," Economics Letters, Elsevier, vol. 136(C), pages 184-186.
    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. Wang, Leonard F.S. & Chen, Tai-Liang, 2011. "Mixed oligopoly, optimal privatization, and foreign penetration," Economic Modelling, Elsevier, vol. 28(4), pages 1465-1470, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:ebl:ecbull:v:17:y:2007:i:9:p:1-9 is not listed on IDEAS
    2. Shuichi Ohori, 2006. "Environmental tax and trade liberalization in a mixed duopoly," KIER Working Papers 622, Kyoto University, Institute of Economic Research.
    3. repec:ebl:ecbull:v:17:y:2006:i:5:p:1-9 is not listed on IDEAS
    4. Shuichi Ohori, 2006. "Trade liberalization, consumption externalities and the environment: a mixed duopoly approach," Economics Bulletin, AccessEcon, vol. 17(5), pages 1-9.
    5. Amarjyoti Mahanta, 2019. "Endogenous strategic variable in a mixed duopoly," Journal of Economics, Springer, vol. 128(1), pages 47-65, September.
    6. Naoto Jinji, 2013. "Is Corporate Environmentalism Good for Domestic Welfare?," Review of International Economics, Wiley Blackwell, vol. 21(5), pages 901-911, November.
    7. Kazuhiro Ohnishi, 2014. "Sequential Mixed Competition with a Foreign Joint-stock Firm," International Journal of Social Sciences and Management Studies (IJSSMS), The Economics and Social Development Organization (TESDO), vol. 1(2), pages 38-52, June.
    8. O. Amerighi & G. De Feo, 2007. "Competition for FDI in the Presence of a Public Firm and the Effects of Privatization," Working Papers 605, Dipartimento Scienze Economiche, Universita' di Bologna.
    9. Rabah Amir & Giuseppe Feo, 2014. "Endogenous timing in a mixed duopoly," International Journal of Game Theory, Springer;Game Theory Society, vol. 43(3), pages 629-658, August.
    10. Arghya Ghosh & Manipushpak Mitra & Bibhas Saha, 2015. "Privatization, Underpricing, and Welfare in the Presence of Foreign Competition," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(3), pages 433-460, June.
    11. Ming Lin & Toshihiro Matsumura, 2012. "Presence of foreign investors in privatized firms and privatization policy," Journal of Economics, Springer, vol. 107(1), pages 71-80, September.
    12. Ishida, Junichiro & Matsushima, Noriaki, 2009. "Should civil servants be restricted in wage bargaining? A mixed-duopoly approach," Journal of Public Economics, Elsevier, vol. 93(3-4), pages 634-646, April.
    13. Lee, Sang-Ho & Matsumura, Toshihiro & Sato, Susumu, 2017. "A New Approach to Free Entry Markets in Mixed Oligopolies: Welfare Implications," MPRA Paper 76450, University Library of Munich, Germany.
    14. Oscar Amerighi & Giuseppe De Feo, 2000. "On the FDI-Attracting Property of Privatization," Working Papers 3_214, Dipartimento di Scienze Economiche e Statistiche, Università degli Studi di Salerno.
    15. Shih-Jye Wu & Yang-Ming Chang & Hung-Yi Chen, 2016. "Imported inputs and privatization in downstream mixed oligopoly with foreign ownership," Canadian Journal of Economics, Canadian Economics Association, vol. 49(3), pages 1179-1207, August.
    16. Toshihiro Matsumura & Yoshihiro Tomaru, 2013. "Mixed duopoly, privatization, and subsidization with excess burden of taxation," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 46(2), pages 526-554, May.
    17. Xu, Lili & Lee, Sang-Ho & Wang, Leonard, 2017. "Strategic Trade and Privatization Policies in Bilateral Mixed Markets," MPRA Paper 80340, University Library of Munich, Germany.
    18. Ohnishi, Kazuhiro, 2019. "Capacity choice in an international mixed triopoly," MPRA Paper 94051, University Library of Munich, Germany.
    19. Haraguchi, Junichi & Matsumura, Toshihiro & Yoshida, Shohei, 2018. "Competitive pressure from neighboring markets and optimal privatization policy," Japan and the World Economy, Elsevier, vol. 46(C), pages 1-8.
    20. Heywood, John S. & Ye, Guangliang, 2009. "Mixed oligopoly and spatial price discrimination with foreign firms," Regional Science and Urban Economics, Elsevier, vol. 39(5), pages 592-601, September.
    21. Alessandra Chirco & Marcella Scrimitore, 2010. "Price Competition in International Mixed Oligopolies," Working Paper series 48_10, Rimini Centre for Economic Analysis.
    22. Toshihiro Matsumura & Noriaki Matsushima & Ikuo Ishibashi, 2009. "Privatization and entries of foreign enterprises in a differentiated industry," Journal of Economics, Springer, vol. 98(3), pages 203-219, December.

    More about this item

    JEL classification:

    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • F1 - International Economics - - Trade

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ebl:ecbull:eb-07q00006. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: John P. Conley (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.