Environmental Policies and Mergers¿ Externalities

A Cournot oligopolistic setting model of trade is characterizedby local and foreign firms competing in the presence of pollution quotaand tax. Local firms are foreign-owned (FDI) and repatriate their profits.First, we analyze the impact on welfare given by the merger of the localfirms, as a response...

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Detalles Bibliográficos
Autores: Rafael S. Espinosa Ramirez, M. Ozgur Kayalica
Tipo de recurso: artículo
Estado:Versión publicada
Fecha de publicación:2007
País:México
Institución:Universidad de Guadalajara
Repositorio:Redalyc-UDG
OAI Identifier:oai:redalyc.org:32316102
Acceso en línea:https://www.redalyc.org/articulo.oa?id=32316102
Access Level:acceso abierto
Palabra clave:Economía y Finanzas
mergers
emission permits
environmental policies
Descripción
Sumario:A Cournot oligopolistic setting model of trade is characterizedby local and foreign firms competing in the presence of pollution quotaand tax. Local firms are foreign-owned (FDI) and repatriate their profits.First, we analyze the impact on welfare given by the merger of the localfirms, as a response to external firms’ competition and pollution abatementcosts. Second, when merger is welfare decreasing, we study the bestresponse of the government in order to compensate this negative externality.Finally, we compare the pollution quota and tax in order to determinetheir efficiency as a policy instrument.