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Environmental Policy and Firm Localisation

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  • Francesco Prota

Abstract

The delocation of firms is often viewed as a major outcome of rigorous environmental policy. In this paper, we study the impact of a strict anti-pollution policy pursued by a government on domestic firms locational decisions and determine the main variables that interact with such a policy. Some preliminary implications for welfare are also considered. Section 2 presents the model, while Section 3 derives Cournot-Nash equilibria in the two market and. Section 4 goes on to consider the issue of the optimal location choice made by firms in response to the environmental policy enforced by the government. In section 5 we analyse the alternative strategies a government can adopt and the possible effects on welfare,while the final section summarizes the results.

Suggested Citation

  • Francesco Prota, 2004. "Environmental Policy and Firm Localisation," QA - Rivista dell'Associazione Rossi-Doria, Associazione Rossi Doria, issue 3, July.
    • Handle: RePEc:rar:journl:0103
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    More about this item

    Keywords

    Politica ambientale; Localizzazione produttiva; Concorrenza imperfetta;
    All these keywords.

    JEL classification:

    • H70 - Public Economics - - State and Local Government; Intergovernmental Relations - - - General
    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General

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