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Partial cross-ownership and strategic environmental policy

Author

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  • 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 info:eu-repo/grantAgreeme, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
    • Handle: RePEc:ehu:ikerla:6367
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    References listed on IDEAS

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    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.
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    3. 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.
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    Cited by:

    1. Fanti, Luciano & Gori, Luca, 2011. "Cross-ownership and stability in a Cournot duopoly," MPRA Paper 34574, University Library of Munich, Germany.

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