Firm Dynamics with Tradable Output Permits
Quinn Weninger (weninger@iastate.edu) and
Richard Just
American Journal of Agricultural Economics, 2002, vol. 84, issue 3, 572-584
Abstract:
We study firm dynamics, firm value, equilibrium permit prices and market efficiency in a natural resource industry that is managed with tradable output permits. New firms must purchase capital and output permits before they enter. Active firms must consider the economic cost of capital and the cost of owning the permit when contemplating exit. The value of the capital used in the production process has nonseparable effects on permit prices and market efficiency. Costly investment reversibility (in the firm's productive capital) and uncertainty reduce permit prices and prolong the abandonment of unproductive capital. Policies to improve economic performance are identified. Copyright 2002, Oxford University Press.
Date: 2002
References: Add references at CitEc
Citations: View citations in EconPapers (18)
Downloads: (external link)
http://hdl.handle.net/10.1111/1467-8276.00320 (application/pdf)
Access to full text is restricted to subscribers.
Related works:
Working Paper: Firm Dynamics with Tradable Output Permits (2002)
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:oup:ajagec:v:84:y:2002:i:3:p:572-584
Access Statistics for this article
American Journal of Agricultural Economics is currently edited by Madhu Khanna, Brian E. Roe, James Vercammen and JunJie Wu
More articles in American Journal of Agricultural Economics from Agricultural and Applied Economics Association Contact information at EDIRC.
Bibliographic data for series maintained by Oxford University Press (joanna.bergh@oup.com).