 Market competition, lobbying influence and environmental externalitiesMarco Catola and Simone D'Alessandro () European Journal of Political Economy, 2020, vol. 63, issue C Abstract: In this paper, we contribute to the debate regarding the relationship between lobbying and environmental regulation by explicitly taking into account the role of market competition. We analyse how the number of firms affects both the effectiveness of lobbying in fighting environmental regulation and the individual incentive for firms to switch to green technology. To explore this issue, we present a Cournot oligopoly where firms can choose between abating the environmental externality or lobbying the government to hold a loose regulation. We investigate two alternative government's political objectives. In the first, government aims to only minimise the externality, while in the second, it also cares about the consumers surplus. We find that, in both cases, the higher the number of firms, the higher the incentive to abate. However, while in the first case, either both types of firms coexist or all firms switch to be green, in the other case, there exists a minimum the number of firms below which all firms remain polluting. Keywords: Lobbying; Interest group; Regulation; Pollution (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:poleco:v:63:y:2020:i:c:s0176268020300343 DOI: 10.1016/j.ejpoleco.2020.101886 Access Statistics for this article European Journal of Political Economy is currently edited by J. De Haan, A. L. Hillman and H. W. Ursprung More articles in European Journal of Political Economy from Elsevier |
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