EconPapers    
Economics at your fingertips  
 

Emission Tax and Environmental Corporate Social Responsibility Under Relative Profit Performance Competition: Committed Versus Time‐Consistent Tax Policies

Mingqing Xing and Sang‐Ho Lee

Journal of Public Economic Theory, 2025, vol. 27, issue 4

Abstract: This paper considers a green managerial delegation contract where the managers face a relative profit performance competition and examines the impact of emission taxes on a firm's environmental and social performances. When the owners can determine profit‐oriented environmental corporate social responsibility (ECSR), we compare committed tax and time‐consistent tax cases and show that owners adopt ECSR only if the competition managers face is severe enough in both cases. The resulting industry profits are non‐monotone in the severity of competition only when firms adopt ECSR under a time‐consistent tax. Our findings suggest that the government should increase its credibility in the tax commitment when competition is intense, while it should coordinate with regulated firms regarding their optimal regulatory timing when competition is less severe and product substitutability is high.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/jpet.70056

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:jpbect:v:27:y:2025:i:4:n:e70056

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1097-3923

Access Statistics for this article

Journal of Public Economic Theory is currently edited by Rabah Amir, Gareth Myles and Myrna Wooders

More articles in Journal of Public Economic Theory from Association for Public Economic Theory Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().

 
Page updated 2025-08-27
Handle: RePEc:bla:jpbect:v:27:y:2025:i:4:n:e70056