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Privatization and the Environment in a Mixed Duopoly with Pollution Abatement

  • Leonard F. S. Wang

    ()

    (Department of Applied Economics, National University of Kaoshiung)

  • Ya-chin Wang

    ()

    (Department of Finance and Banking, Kun Shan University)

  • Lihong Zhao

    ()

    (China Huanqiu Contracting & Engineering Corporation)

Registered author(s):

    The purpose of this note is to re-examine whether privatization improves the environment or not in a mixed duopolistic model. In our model, both firms adopt pollution abatement technologies in response to the environmental tax imposed by the government. It is shown that privatization unambiguously reduces the pollution levels of firms. Namely, privatization does improve the environment. Moreover, by implementing partial-privatization policy, social welfare can be enhanced.

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    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I4-P300.pdf
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    Article provided by AccessEcon in its journal Economics Bulletin.

    Volume (Year): 29 (2009)
    Issue (Month): 4 ()
    Pages: 3112-3119

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    Handle: RePEc:ebl:ecbull:eb-09-00590
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    1. Toshihiro Matsumura & Osamu Kanda, 2005. "Mixed Oligopoly at Free Entry Markets," Journal of Economics, Springer, vol. 84(1), pages 27-48, 02.
    2. Bradburd, Ralph, 1992. "Privatization of natural monopoly public enterprises : the regulation issue," Policy Research Working Paper Series 864, The World Bank.
    3. R. Simpson, 1995. "Optimal pollution taxation in a Cournot duopoly," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 6(4), pages 359-369, December.
    4. Kenji Fujiwara, 2007. "Partial Privatization in a Differentiated Mixed Oligopoly," Journal of Economics, Springer, vol. 92(1), pages 51-65, September.
    5. Xiangkang Yin, 2003. "Corrective Taxes under Oligopoly with Inter-Firm Externalities," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 26(2), pages 269-277, October.
    6. Kazuhiko Kato, 2006. "Can Allowing to Trade Permits Enhance Welfare in Mixed Oligopoly?," Journal of Economics, Springer, vol. 88(3), pages 263-283, 09.
    7. repec:ebl:ecbull:v:12:y:2008:i:19:p:1-10 is not listed on IDEAS
    8. Beladi, Hamid & Chao, Chi-Chur, 2006. "Does privatization improve the environment?," Economics Letters, Elsevier, vol. 93(3), pages 343-347, December.
    9. John Vickers & George Yarrow, 1991. "Economic Perspectives on Privatization," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 111-132, Spring.
    10. Matsumura, Toshihiro, 1998. "Partial privatization in mixed duopoly," Journal of Public Economics, Elsevier, vol. 70(3), pages 473-483, December.
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