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Pollution for Sale: Firms’ Characteristics and Lobbying Outcome

Dapeng Cai () and Jie Li ()
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Jie Li: Jinan University

Environmental & Resource Economics, 2020, vol. 77, issue 3, No 3, 539-564

Abstract: Abstract We consider how the attributes of individual firms may influence the lobbying outcome concerning the setting of the stringency of a costly environmental regulation. We show that when there is a strong asymmetry between firms, a clean firm may lobby to strengthen the regulation, while its dirty rival lobbies to weaken the regulation. Moreover, the lobbying process is asymmetric in that the clean firm finds it more difficult to reach its objectives: although only a sufficiently large clean firm can succeed in strengthening regulation, a relatively small dirty firm can successfully bend a regulation toward its own interest.

Keywords: Common agency; Corporate political activity (CPA); Emission standard; Lobbying; Pollution tax; Raising rivals’ costs (search for similar items in EconPapers)
JEL-codes: H25 L13 L51 Q58 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1007/s10640-020-00507-z

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