Environmental Policy and Firm Localisation
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.
Volume (Year): (2004)
Issue (Month): 3 (July)
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