Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92780
Authors: 
Ikefuji, Masako
Itaya, Jun-ichi
Okamura, Makoto
Year of Publication: 
2009
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 762
Abstract: 
This paper explores optimal environmental tax policy under which duopoly firms strategically choose the location of their plants in a simple three-stage game. We examine how the relationship between the optimal emission tax and the choice of location of duopoly firms affects the welfare of the home country. We characterize the relationship between the optimal emission tax and the fixed cost, depending on the degree of environmental damage from production. Finally, we show the existence of asymmetric equilibrium in which either firm chooses relocation of its plant even if the duopoly firms are identical ex ante.
Subjects: 
Environmental policy
Relocation
Welfare
JEL: 
H23
L13
Document Type: 
Working Paper

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