TBargaining between firms and environmental protection bureaus: Water pollution in China
Purpose – The purpose of this paper is to identify the factors that affect China's water pollution in the prospective of environmental enforcement using a bargaining approach. Design/methodology/approach – A bargaining model that determines the level of discharge standard and over-discharge fee is constructed. Comparative static analysis is conducted. Findings – Comparative static analysis shows that enlarging the economic incentive of firm managers can aggravate water pollution. Moreover, increasing firm managers' bargaining power or reserve utility has the same negative effect. On the other hand, however, restricting the financial supports for environmental protection bureaus or increasing firm manager's fixed income can alleviate the water pollution. Originality/value – This is the first research that applies bargaining approach to studying the determination of over-discharge fees and the standard of discharge level.
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Volume (Year): 3 (2011)
Issue (Month): 1 (January)
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References listed on IDEAS
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- Helfand, Gloria E, 1991. "Standards versus Standards: The Effects of Different Pollution Restrictions," American Economic Review, American Economic Association, vol. 81(3), pages 622-34, June.
- Hua Wang & Mamingi, Nlandu & Laplante, Benoit & Dasgupta, Susmita, 2002.
"Incomplete enforcement of pollution regulation : bargaining power of Chinese factories,"
Policy Research Working Paper Series
2756, The World Bank.
- Hua Wang & Nlandu Mamingi & Benoit Laplante & Susmita Dasgupta, 2003. "Incomplete Enforcement of Pollution Regulation: Bargaining Power of Chinese Factories," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 24(3), pages 245-262, March.
- Holmstrom, Bengt & Milgrom, Paul, 1991. "Multitask Principal-Agent Analyses: Incentive Contracts, Asset Ownership, and Job Design," Journal of Law, Economics and Organization, Oxford University Press, vol. 7(0), pages 24-52, Special I.
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