Firm Dynamics with Tradable Output Permits
Quinn Weninger () and
Staff General Research Papers Archive from Iowa State University, Department of Economics
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.
References: Add references at CitEc
Citations View citations in EconPapers (13) Track citations by RSS feed
Published in American Journal of Agricultural Economics, August 2002, vol. 84 no. 3, pp. 572-584
There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.
Journal Article: 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)
Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:10831
Access Statistics for this paper
More papers in Staff General Research Papers Archive from Iowa State University, Department of Economics Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070. Contact information at EDIRC.
Bibliographic data for series maintained by Curtis Balmer ().