Environmental Policies and Mergers’ Externalities

Rafael Espinosa Ramirez () and M. Ozgur Kayalica ()
Additional contact information
M. Ozgur Kayalica: Departament of Management Engineering, Istanbul Technical University, Istanbul, Turkey.

Economía Mexicana NUEVA ÉPOCA, 2007, vol. XVI, issue 1, 47-74

Abstract: A Cournot oligopolistic setting model of trade is characterized by local and foreign firms competing in the presence of pollution quota and tax. Local firms are foreign-owned (FDI) and repatriate their profits. First, we analyze the impact on welfare given by the merger of the local firms, as a response to external firms’ competition and pollution abatement costs. Second, when merger is welfare decreasing, we study the best response of the government in order to compensate this negative externality. Finally, we compare the pollution quota and tax in order to determine their efficiency as a policy instrument.

Keywords: environmental policies; mergers; emission permits (search for similar items in EconPapers)
JEL-codes: F2 H2 L1 N5 (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.economiamexicana.cide.edu/num_anteriore ... INOSA_Y_KAYALICA.pdf (application/pdf)

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:emc:ecomex:v:16:y:2007:i:1:p:47-74

Access Statistics for this article

Economía Mexicana NUEVA ÉPOCA is currently edited by Juan Rosellón

More articles in Economía Mexicana NUEVA ÉPOCA from CIDE, División de Economía Contact information at EDIRC.
Bibliographic data for series maintained by Ricardo Tiscareño ( this e-mail address is bad, please contact ).