Partial cross-ownership and strategic environmental policy

Juan Bárcena-Ruiz and María Luz Campo

Resource and Energy Economics, 2012, vol. 34, issue 2, 198-210

Abstract: This paper analyzes the effect of passive investment in rival firms on the setting of cooperative and non-cooperative environmental taxes. We consider two firms located in different countries, with each firm owning the same percentage of the stock of its rival. We show that bilateral partial cross-ownership affects the taxes set by the countries in the cooperative and non-cooperative cases. When the stake that one firm has in its rival is great enough and environmental spillovers are low enough, cooperative taxes are lower than non-cooperative taxes. For the remaining values of parameters the opposite result is obtained.

Keywords: Environmental taxes; International trade; Global pollution; Partial ownership (search for similar items in EconPapers)
JEL-codes: F12 L13 Q58 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:34:y:2012:i:2:p:198-210

DOI: 10.1016/j.reseneeco.2011.12.003

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