IDEAS home Printed from https://ideas.repec.org/p/ehu/ikerla/32820.html
   My bibliography  Save this paper

Partial ownership of local firms and zoning of neighboring towns

Author

Listed:
  • Bárcena Ruiz, Juan Carlos
  • Casado Izaga, Francisco Javier

Abstract

This paper investigates zoning in two neighboring towns in which firms are owned by investors that reside in the two towns. We find that local regulators use zoning strategically depending on the weight of local profits in social welfare. When they are high enough both towns are zoned. For intermediate values an asymmetric result emerges: only one regulator resorts to zoning despite the symmetry in the percentage of ownership of the neighboring firms. For a low weight of local profits, towns may or may not be zoned. Zoning restrictions on the location of firms are tighter when local profits are more significant for social welfare.

Suggested Citation

  • Bárcena Ruiz, Juan Carlos & Casado Izaga, Francisco Javier, 2019. "Partial ownership of local firms and zoning of neighboring towns," IKERLANAK info:eu-repo/grantAgreeme, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
    • Handle: RePEc:ehu:ikerla:32820
    as

    Download full text from publisher

    File URL: https://addi.ehu.es/handle/10810/32820
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ming Lin & Toshihiro Matsumura, 2012. "Presence of foreign investors in privatized firms and privatization policy," Journal of Economics, Springer, vol. 107(1), pages 71-80, September.
    2. Giacomo Corneo & Oliver Jeanne, 1994. "Oligopole mixte dans un marché commun," Annals of Economics and Statistics, GENES, issue 33, pages 73-90.
    3. repec:adr:anecst:y:1994:i:33:p:06 is not listed on IDEAS
    4. Toshihiro Matsumura & Noriaki Matsushima & Ikuo Ishibashi, 2009. "Privatization and entries of foreign enterprises in a differentiated industry," Journal of Economics, Springer, vol. 98(3), pages 203-219, December.
    5. Juan Carlos Bárcena-Ruiz & F. Javier Casado-Izaga, 2017. "Zoning A Cross-Border City," Journal of Regional Science, Wiley Blackwell, vol. 57(1), pages 173-189, January.
      • Bárcena Ruiz, Juan Carlos & Casado Izaga, Francisco Javier, 2015. "Zoning a cross-border city," IKERLANAK info:eu-repo/grantAgreeme, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
    6. Inoue, Tomohiro & Kamijo, Yoshio & Tomaru, Yoshihiro, 2009. "Interregional mixed duopoly," Regional Science and Urban Economics, Elsevier, vol. 39(2), pages 233-242, March.
    7. Braid, Ralph M., 2000. "A Spatial Model of Tax Competition with Multiple Tax Instruments," Journal of Urban Economics, Elsevier, vol. 47(1), pages 88-114, January.
    8. Junichi Suzuki, 2013. "Land Use Regulation As A Barrier To Entry: Evidence From The Texas Lodging Industry," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 54(2), pages 495-523, May.
    9. Hamid Hamoudi & Marta Risueño, 2012. "The Effects Of Zoning In Spatial Competition," Journal of Regional Science, Wiley Blackwell, vol. 52(2), pages 361-374, May.
    10. Bas Spierings & Martin van der Velde, 2013. "Cross-Border Differences and Unfamiliarity: Shopping Mobility in the Dutch-German Rhine-Waal Euroregion," European Planning Studies, Taylor & Francis Journals, vol. 21(1), pages 5-23, January.
    11. Kenneth Fjell & Debashis Pal, 1996. "A Mixed Oligopoly in the Presence of Foreign Private Firms," Canadian Journal of Economics, Canadian Economics Association, vol. 29(3), pages 737-743, August.
    12. Juan Carlos Bárcena-Ruiz & Francisco Javier Casado-Izaga, 2014. "Zoning Under Spatial Price Discrimination," Economic Inquiry, Western Economic Association International, vol. 52(2), pages 659-665, April.
    13. Debashis Pal & Mark D. White, 1998. "Mixed Oligopoly, Privatization, and Strategic Trade Policy," Southern Economic Journal, John Wiley & Sons, vol. 65(2), pages 264-281, October.
    14. d'Aspremont, C & Gabszewicz, Jean Jaskold & Thisse, J-F, 1979. "On Hotelling's "Stability in Competition"," Econometrica, Econometric Society, vol. 47(5), pages 1145-1150, September.
    15. Chen, Chin-Sheng & Lai, Fu-Chuan, 2008. "Location choice and optimal zoning under Cournot competition," Regional Science and Urban Economics, Elsevier, vol. 38(2), pages 119-126, March.
    16. Cato, Susumu & Matsumura, Toshihiro, 2017. "Optimal Production Tax and Privatization Policies under an Endogenous Market Structure," MPRA Paper 82893, University Library of Munich, Germany.
    17. Toshihiro Matsumura & Noriaki Matsushima, 2012. "Locating Outside A Linear City Can Benefit Consumers," Journal of Regional Science, Wiley Blackwell, vol. 52(3), pages 420-432, August.
    18. Juan Carlos Bárcena‐Ruiz & F. Javier Casado‐Izaga, 2018. "Zoning a metropolitan area," Papers in Regional Science, Wiley Blackwell, vol. 97(S1), pages 123-137, March.
    19. Juan Carlos Bárcena-Ruiz & F. Javier Casado-Izaga & Hamid Hamoudi & Isabel Rodriguez, 2016. "Optimal zoning in the unconstrained Hotelling game," Papers in Regional Science, Wiley Blackwell, vol. 95(2), pages 427-435, June.
    20. Juan Bárcena Ruiz & F. Casado-Izaga & Hamid Hamoudi, 2014. "Optimal zoning of a mixed duopoly," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(1), pages 141-153, January.
    21. Heywood, John S. & Ye, Guangliang, 2009. "Mixed oligopoly and spatial price discrimination with foreign firms," Regional Science and Urban Economics, Elsevier, vol. 39(5), pages 592-601, September.
    22. Robert Hrelja & Karolina Isaksson & Tim Richardson, 2012. "IKEA and Small City Development in Sweden: Planning Myths, Realities, and Unsustainable Mobilities," International Planning Studies, Taylor & Francis Journals, vol. 17(2), pages 125-145.
    23. Stefano Colombo, 2012. "On optimal zoning in a linear town with Cournot competitors," Letters in Spatial and Resource Sciences, Springer, vol. 5(2), pages 113-118, July.
    24. Carol E. Heim, 2012. "Border Wars: Tax Revenues, Annexation, and Urban Growth in Phoenix," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 36(4), pages 831-859, July.
    25. Matsushima, Noriaki & Matsumura, Toshihiro, 2006. "Mixed oligopoly, foreign firms, and location choice," Regional Science and Urban Economics, Elsevier, vol. 36(6), pages 753-772, November.
    26. Lai, Fu-Chuan & Tsai, Jyh-Fa, 2004. "Duopoly locations and optimal zoning in a small open city," Journal of Urban Economics, Elsevier, vol. 55(3), pages 614-626, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Toshihiro Matsumura & Yoshihiro Tomaru, 2015. "Mixed duopoly, location choice, and shadow cost of public funds," Southern Economic Journal, John Wiley & Sons, vol. 82(2), pages 416-429, October.
    2. Juan Carlos Bárcena-Ruiz & F. Javier Casado-Izaga, 2017. "Zoning A Cross-Border City," Journal of Regional Science, Wiley Blackwell, vol. 57(1), pages 173-189, January.
      • Bárcena Ruiz, Juan Carlos & Casado Izaga, Francisco Javier, 2015. "Zoning a cross-border city," IKERLANAK info:eu-repo/grantAgreeme, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
    3. Hang Cao & Leonard F. S. Wang, 2023. "Optimal zoning of managerial duopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 58-67, January.
    4. Haraguchi, Junichi & Matsumura, Toshihiro, 2014. "Price versus quantity in a mixed duopoly with foreign penetration," Research in Economics, Elsevier, vol. 68(4), pages 338-353.
    5. Juan Carlos Bárcena-Ruiz & F. Javier Casado-Izaga, 2018. "Optimal size of a residential area within a municipality," Journal of Economics, Springer, vol. 124(1), pages 75-92, May.
    6. Lee, Sang-Ho & Matsumura, Toshihiro & Sato, Susumu, 2017. "A New Approach to Free Entry Markets in Mixed Oligopolies: Welfare Implications," MPRA Paper 76450, University Library of Munich, Germany.
    7. Hongkun Ma & X. Henry Wang & Chenhang Zeng, 2021. "Location choice and costly product differentiation in a mixed duopoly," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 66(1), pages 137-159, February.
    8. Juan Bárcena Ruiz & F. Casado-Izaga & Hamid Hamoudi, 2014. "Optimal zoning of a mixed duopoly," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 52(1), pages 141-153, January.
    9. Wang, Leonard F.S. & Tomaru, Yoshihiro, 2015. "The feasibility of privatization and foreign penetration," International Review of Economics & Finance, Elsevier, vol. 39(C), pages 36-46.
    10. Juan Carlos Bárcena-Ruiz & F. Javier Casado-Izaga & Hamid Hamoudi & Isabel Rodriguez, 2016. "Optimal zoning in the unconstrained Hotelling game," Papers in Regional Science, Wiley Blackwell, vol. 95(2), pages 427-435, June.
    11. Okuyama, Suzuka, 2021. "Behavior-based Price Discrimination in the Domestic and International Mixed duopoly," MPRA Paper 110206, University Library of Munich, Germany.
    12. Cato, Susumu & Matsumura, Toshihiro, 2017. "Optimal Production Tax and Privatization Policies under an Endogenous Market Structure," MPRA Paper 82893, University Library of Munich, Germany.
    13. Juan Carlos Bárcena-Ruiz & Francisco Javier Casado-Izaga, 2014. "Zoning Under Spatial Price Discrimination," Economic Inquiry, Western Economic Association International, vol. 52(2), pages 659-665, April.
    14. Sang-Ho Lee & Toshihiro Matsumura & Susumu Sato, 2018. "An analysis of entry-then-privatization model: welfare and policy implications," Journal of Economics, Springer, vol. 123(1), pages 71-88, January.
    15. Haraguchi, Junichi & Matsumura, Toshihiro & Yoshida, Shohei, 2018. "Competitive pressure from neighboring markets and optimal privatization policy," Japan and the World Economy, Elsevier, vol. 46(C), pages 1-8.
    16. Toshihiro Matsumura & Akira Ogawa, 2017. "Inefficient but Robust Public Leadership," Journal of Industry, Competition and Trade, Springer, vol. 17(4), pages 387-398, December.
    17. Toshihiro Matsumura & Akira Ogawa, 2010. "On The Robustness Of Private Leadership In Mixed Duopoly," Australian Economic Papers, Wiley Blackwell, vol. 49(2), pages 149-160, June.
    18. Junichi Haraguchi & Toshihiro Matsumura, 2020. "Endogenous public and private leadership with diverging social and private marginal costs," Manchester School, University of Manchester, vol. 88(5), pages 699-730, September.
    19. Hiroaki Ino & Toshihiro Matsumura, 2010. "What role should public enterprises play in free-entry markets?," Journal of Economics, Springer, vol. 101(3), pages 213-230, November.
    20. Sato, Susumu & Matsumura, Toshihiro, 2018. "Flexible Privatization Policy in Free-Entry Markets," MPRA Paper 88444, University Library of Munich, Germany.

    More about this item

    Keywords

    zoning; spatial; competition; foreign; ownership; location; choice;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • R32 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Other Spatial Production and Pricing Analysis
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ehu:ikerla:32820. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Alcira Macías Redondo (email available below). General contact details of provider: https://edirc.repec.org/data/f1ehues.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.