Indrani, Roy Chowdhury (2006): Mergers, pollution and environmental policy.
Download (147kB) | Preview
We examine the impact of abatement taxes on the pollution level in a duopoly framework with endogenous market structure. We demonstrate that an increase in abatement taxes could trigger a regime-switch from Cournot competition to merger, as well as from merger to Cournot competition. The nature of this switch is critically dependent on the nature of merger costs. However, in either case, this may cause the pollution level to increase.
|Item Type:||MPRA Paper|
|Original Title:||Mergers, pollution and environmental policy|
|Keywords:||Mergers, pollution, abatement tax, endogenous market structure|
|Subjects:||Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics
Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development ; Environment and Trade ; Sustainability ; Environmental Accounts and Accounting ; Environmental Equity ; Population Growth
O - Economic Development, Innovation, Technological Change, and Growth > O1 - Economic Development > O13 - Agriculture ; Natural Resources ; Energy ; Environment ; Other Primary Products
|Depositing User:||Roy Chowdhury|
|Date Deposited:||24. Mar 2008 00:23|
|Last Modified:||15. Mar 2015 09:44|
S. Barrett, Strategic environmental policy and international trade, Journal of Public Economics, 325-38 (1994).
W.J. Baumol and W.E. Oates, The Theory of Environmental Policy, Cambridge University Press, Cambridge, England (1998).
J.M. Buchanan, External diseconomies, corrective taxes and market structure, American Economic Review 59, 174-177 (1969).
C. Carraro and D. Siniscalco, Technical innovation and environmental protection, environmental policy reconsidered: the role of technological innovation, European Economic Review 38, 545-554 (1994).
C. Carraro and A. Soubeyran, Environmental feedback and optimal taxation in oligopoly, economic policy for the environmental and natural resources: techniques for the management and control of pollution, in ``New Horizons in Environmental Economics Series'' (A. Xepapadeas, Ed.), Cheltenham, U.K. and Lyme, N.H.: Elgar ( 1996).
K. Conrad and J. Wang, The effect of emission taxes and abatement subsidies on market structure, International Journal of Industrial Organization 11, 499-518 (1993).
A. Jacquemin, Horizontal concentration and European merger policy, European Economic Review 34, 539-550 (1990).
T. Kabiraj, C.C. Lee and S. Marjit, Cultural compatibility and joint venture instability - A theoretical analysis, ERU Discussion Paper No. 2001-02 (2001).
Y. Katsoulacos and A. Xepapadeas, Environmental policy under oligopoly with endogenous market structure, Scandinavian Journal of Economics 97, 411-420 (1995).
Y. Katsoulacos and A. Xepapadeas, Emission taxes and market structure, in ``Environmental Policy and Market Structure'' (C. Carraro, Y. Katsoulacos and A. Xepapadeas Eds.), Kluwer Academic Publishers, Dordrecht, Boston and London (1996).
C.D. Kolstad, Environmental Economics, Oxford University Press, New York Oxford (2000).
S. Martin, Advanced Industrial Economics, Blackwell Publishers, Cambridge, Massachusetts, USA (1993).
R.R. Miller, J.D. Glenn, F.Z. Jaspersen and Y., Karmakolias, International joint ventures in developing countries: happy marriages? Discussion paper no. 29, International Finance Corporation, World Bank, Washington D.C. (1996).
P. Pekar and R. Allio, Making alliances Work - guideline for success, Long Range Planning 27, 54-65 (1994).
M.K. Perry and R.H. Porter, Oligopoly and the incentive for horizontal merger, American Economic Review 75, 219-227 (1985).
M. Roy, Mergers and take-overs: the Indian scene during the nineties, in A. Bagchi Ed. Economy and Organization: Indian Institutions under the Neo-liberal Regime, Sage, New Delhi (1997).
S.W. Salant, S. Switzer and R.J. Reynolds, Losses from horizontal merger: the effect of an exogenous change in industry structure on Cournot-Nash equilibrium, Quarterly Journal of Economics 98, 185-213 (1983).
R. Srinivasan, RPL-RIL merger: excellent synergies, smart timing? Business Line, Saturday, March 2 (2002).
A. Ulph, Environmental policy and international trade when governments and producers act strategically, Journal of Environmental Economics and Management 30, 265-281 (1996a).
A. Ulph, Environmental policy instruments and imperfectly competitive international trade, Environmental and Resource Economics 7, 333-355 (1996b).
G. Zanetti and A. Abate, Salvaguardia dell'ambiente presso le maggiori impresse mondiali, in Stato, Grandi Empresse e Sviluppo Sostenibile (D. Siniscalco, Ed.), Il Munlino, Bologna (1993).