Partial cross-ownership and strategic environmental policy

Juan Carlos Bárcena Ruiz and María Luz Campo Corredera
Authors registered in the RePEc Author Service: Juan Carlos Bárcena-Ruiz

IKERLANAK from Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I

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.

Keywords: environmental taxes; international trade; local pollution; partial ownership (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (1)

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Journal Article: Partial cross-ownership and strategic environmental policy (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:ehu:ikerla:6367

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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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