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Multiproduct Firms and Environmental Policy Coordination

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  • Juan Bárcena-Ruiz
  • María Garzón

Abstract

The literature that analyzes the coordination of environmental taxes by governments considers that firms produce a single good at a single plant. However, in practice firms tend to produce several goods at various production plants (multiproduct firms). These firms may organize themselves in a centralized or decentralized fashion for purposes of decision-making: This affects their output and pollution levels. This paper sets out to analyze the coordination of environmental taxes considering multiproduct firms. We find that the organizational structure chosen by the owners of the firms depends on whether or not governments coordinate with one another in setting taxes, and on whether the goods produced are substitutes or complements. Social welfare is greater if a supranational authority sets taxes in all countries. In this case, joint welfare is never lower if the authority is constrained to set the same tax in all countries. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • Juan Bárcena-Ruiz & María Garzón, 2014. "Multiproduct Firms and Environmental Policy Coordination," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 59(3), pages 407-431, November.
    • Handle: RePEc:kap:enreec:v:59:y:2014:i:3:p:407-431
    DOI: 10.1007/s10640-013-9736-x
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    References listed on IDEAS

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    Cited by:

    1. Bárcena-Ruiz, Juan Carlos & Sagasta, Amagoia, 2022. "International trade and environmental corporate social responsibility," Energy Economics, Elsevier, vol. 115(C).
    2. Bárcena-Ruiz, Juan Carlos & Garzón, María Begoña & Sagasta, Amagoia, 2023. "Environmental corporate social responsibility, R&D and disclosure of “green” innovation knowledge," Energy Economics, Elsevier, vol. 120(C).

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    More about this item

    Keywords

    Environmental coordination; Environmental tax; International trade; Multiproduct firms; Oligopoly; L22; Q56; Q58;
    All these keywords.

    JEL classification:

    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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