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Partial cross-ownership and strategic environmental policy

  • Bárcena Ruiz, Juan Carlos
  • Campo Corredera, María Luz

This paper analyzes the effect that passive investment in rival firms has on the setting of cooperative and non-cooperative environmental taxes. We consider two firms located in different countries, one of which owns a stake in its rival. We show that partial cross-ownership affects the taxes set by the countries in the cooperative and non-cooperative cases. Depending on the stake that one firm has in its rival we show that cooperative taxes may he higher or lower than non-cooperative taxes. Moreover, for intermediate values of the stake, the non-cooperative tax is higher in one country and lower in the other than the cooperative tax.

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File URL: http://hdl.handle.net/10810/6367
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Paper provided by Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I in its series IKERLANAK with number 2011-47.

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Date of creation: 2011
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Handle: RePEc:ehu:ikerla:201147
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Order Information: Postal: Dpto. de Fundamentos del Análisis Económico I, Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain
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  10. Eijffinger, S.C.W. & Wagner, W.B., 2008. "Efficiency of capital taxation in an open economy : Tax competition versus tax exportation," Other publications TiSEM 6927cea9-042d-4ccf-b488-a, Tilburg University, School of Economics and Management.
  11. Malueg, David A., 1992. "Collusive behavior and partial ownership of rivals," International Journal of Industrial Organization, Elsevier, vol. 10(1), pages 27-34, March.
  12. Alley, Wilson A, 1997. "Partial Ownership Arrangements and Collusion in the Automobile Industry," Journal of Industrial Economics, Wiley Blackwell, vol. 45(2), pages 191-205, June.
  13. Hiroshi Ono & Takuya Nakazato & Colin Davis & Wilson Alley, 2004. "Partial ownership arrangements in the Japanese automobile industry; 1990-2000," Journal of Applied Economics, Universidad del CEMA, vol. 0, pages 355-367, November.
  14. Bárcena Ruiz, Juan Carlos & Garzón San Felipe, María Begoña, 2001. "Mixed Oligopoly and Environmental Policy," BILTOKI 2001-05, Universidad del País Vasco - Departamento de Economía Aplicada III (Econometría y Estadística).
  15. Buchanan, James M, 1969. "External Diseconomies, Corrective Taxes, and Market Structure," American Economic Review, American Economic Association, vol. 59(1), pages 174-77, March.
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  17. Joseph Farrell & Carl Shapiro, 1990. "Asset Ownership and Market Structure in Oligopoly," RAND Journal of Economics, The RAND Corporation, vol. 21(2), pages 275-292, Summer.
  18. Juan Bárcena-ruiz & María Garzón, 2003. "Strategic Environmental Standards, Wage Incomes and the Location of Polluting Firms," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 24(2), pages 121-139, February.
  19. Reynolds, Robert J. & Snapp, Bruce R., 1986. "The competitive effects of partial equity interests and joint ventures," International Journal of Industrial Organization, Elsevier, vol. 4(2), pages 141-153, June.
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  21. Kangoh Lee, 2005. "Absentee Ownership of Immobile Factors and Environmental Policies in a Federation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 32(3), pages 407-417, November.
  22. Juan Carlos Bárcena-Ruiz, 2006. "Environmental Taxes and First-Mover Advantages," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 35(1), pages 19-39, September.
  23. Braid, Ralph M., 2005. "Tax competition, tax exporting and higher-government choice of tax instruments for local governments," Journal of Public Economics, Elsevier, vol. 89(9-10), pages 1789-1821, September.
  24. Fujiwara, Kenji, 2009. "Environmental policies in a differentiated oligopoly revisited," Resource and Energy Economics, Elsevier, vol. 31(3), pages 239-247, August.
  25. David Gilo & Yossi Moshe & Yossi Spiegel, 2006. "Partial cross ownership and tacit collusion," RAND Journal of Economics, RAND Corporation, vol. 37(1), pages 81-99, 03.
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