NDLI: The impact of environmental policies on productivity and market competition

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The impact of environmental policies on productivity and market competition

Content Provider	Scilit
Author	Sadeghzadeh, Javad
Copyright Year	2014
Description	While a large body of the literature on environmental policies has focused on the productivity impacts of regulations, less attention has been given to the link between environmental policies and market competition. In this paper, I develop a tractable model that incorporates variable mark-ups to study how a competitive environment is affected by environmental policies in a market with firm heterogeneity and endogenous abatement technology choice. The findings of this study are consistent with the Porter Hypothesis in the sense that environmental regulations motivate abatement technology adoption and enhance productivity and environmental quality. However, the productivity gain is mainly driven by reallocation of resources across firms rather than the induced abatement technological change. Tougher regulations harm the competitive environment by increasing average prices and market concentration. Social welfare also drops because in the absence of strong competition fewer variates are produced in equilibrium.
Related Links	https://www.cambridge.org/core/services/aop-cambridge-core/content/view/C98B71AC38C1D7078A59E029A6874DBD/S1355770X14000035a.pdf/div-class-title-the-impact-of-environmental-policies-on-productivity-and-market-competition-div.pdf
Ending Page	565
Page Count	18
Starting Page	548
ISSN	1355770X
e-ISSN	14694395
DOI	10.1017/s1355770x14000035
Journal	Environment and Development Economics
Issue Number	5
Volume Number	19
Language	English
Publisher	Cambridge University Press (CUP)
Publisher Date	2014-02-17
Access Restriction	Open
Subject Keyword	Environment and Development Economics Agricultural Economics Environmental Policies Market Competition Abatement Technology Competitive Environment
Content Type	Text
Resource Type	Article
Subject	Development Economics and Econometrics Environmental Science

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