IDEAS home Printed from https://ideas.repec.org/p/ehu/ikerla/6367.html
   My bibliography  Save this paper

Partial cross-ownership and strategic environmental policy

Author

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

Abstract

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.

Suggested Citation

  • Bárcena Ruiz, Juan Carlos & Campo Corredera, María Luz, 2011. "Partial cross-ownership and strategic environmental policy," IKERLANAK 2011-47, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
  • Handle: RePEc:ehu:ikerla:6367
    as

    Download full text from publisher

    File URL: https://addi.ehu.es/handle/10810/6367
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Essi Eerola, 2004. "Environmental Tax Competition in the Presence of Multinational Firms," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 11(3), pages 283-298, May.
    2. Braid, Ralph M., 2005. "Tax competition, tax exporting and higher-government choice of tax instruments for local governments," Journal of Public Economics, Elsevier, pages 1789-1821.
    3. Juan Carlos Bárcena-Ruiz, 2006. "Environmental Taxes and First-Mover Advantages," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 19-39.
    4. 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, March.
    5. Malueg, David A., 1992. "Collusive behavior and partial ownership of rivals," International Journal of Industrial Organization, Elsevier, pages 27-34.
    6. Barnett, A H, 1980. "The Pigouvian Tax Rule under Monopoly," American Economic Review, American Economic Association, pages 1037-1041.
    7. Markusen, James R., 1997. "Costly pollution abatement, competitiveness and plant location decisions," Resource and Energy Economics, Elsevier, vol. 19(4), pages 299-320, November.
    8. Fujiwara, Kenji, 2009. "Environmental policies in a differentiated oligopoly revisited," Resource and Energy Economics, Elsevier, vol. 31(3), pages 239-247, August.
    9. Kennedy Peter W., 1994. "Equilibrium Pollution Taxes in Open Economies with Imperfect Competition," Journal of Environmental Economics and Management, Elsevier, vol. 27(1), pages 49-63, July.
    10. Juan Bárcena-Ruiz & María Garzón, 2006. "Mixed Oligopoly and Environmental Policy," Spanish Economic Review, Springer;Spanish Economic Association, pages 139-160.
    11. Kangoh Lee, 2005. "Absentee Ownership of Immobile Factors and Environmental Policies in a Federation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 407-417.
    12. R. Simpson, 1995. "Optimal pollution taxation in a Cournot duopoly," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 359-369.
    13. Fredrik Carlsson, 2000. "Environmental Taxation and Strategic Commitment in Duopoly Models," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 243-256.
    14. Juan Bárcena-ruiz & María Garzón, 2003. "Strategic Environmental Standards, Wage Incomes and the Location of Polluting Firms," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 121-139.
    15. Buchanan, James M, 1969. "External Diseconomies, Corrective Taxes, and Market Structure," American Economic Review, American Economic Association, pages 174-177.
    16. Michael Rauscher, 1995. "Environmental regulation and the location of polluting industries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(2), pages 229-244, August.
    17. Joseph Farrell & Carl Shapiro, 1990. "Asset Ownership and Market Structure in Oligopoly," RAND Journal of Economics, The RAND Corporation, pages 275-292.
    18. 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.
    19. Wolf Wagner & Sylvester Eijffinger, 2008. "Efficiency of capital taxation in an open economy: tax competition versus tax exportation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(6), pages 637-646, December.
    20. Katsoulacos, Yannis & Xepapadeas, Anastasios, 1995. " Environmental Policy under Oligopoly with Endogenous Market Structure," Scandinavian Journal of Economics, Wiley Blackwell, pages 411-420.
    21. Yann Duval & Stephen Hamilton, 2002. "Strategic Environmental Policy and International Trade in Asymmetric Oligopoly Markets," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 9(3), pages 259-271, May.
    22. 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. 7, pages 355-367, November.
    23. 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.
    24. Alistair fnUlph, 1996. "Environmental policy instruments and imperfectly competitive international trade," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 333-355.
    25. repec:rje:randje:v:37:y:2006:1:p:81-99 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Juan Bárcena-Ruiz & María Garzón, 2014. "Multiproduct Firms and Environmental Policy Coordination," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, pages 407-431.
    2. Luciano Fanti, 2014. "Welfare effects of cross-ownership in a unionised duopoly," ECONOMIA E POLITICA INDUSTRIALE, FrancoAngeli Editore, vol. 2014(2), pages 21-41.
    3. Marco LiCalzi, 2016. "Gershkov, Alex and Benny Moldovanu: Dynamic allocation and pricing: a mechanism design approach," Journal of Economics, Springer, pages 181-183.
    4. repec:eee:resene:v:50:y:2017:i:c:p:36-50 is not listed on IDEAS
    5. Fanti, Luciano, 2013. "Cross-ownership and unions in a Cournot duopoly: When profits reduce with horizontal product differentiation," Japan and the World Economy, Elsevier, pages 34-40.

    More about this item

    Keywords

    environmental taxes; international trade; local pollution; partial ownership;

    JEL classification:

    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

    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:6367. See general information about how to correct material in RePEc.

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

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.