Optimal Production Tax in a Mixed Market with an Endogenous Market Structure

Cato, Susumu; Matsumura, Toshihiro

doi:10.1111/manc.12266

Cited by 7 publications

(9 citation statements)

References 27 publications

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“…7 The partial ownership of a local firm by foreign investors may condition the regulators' incentives to zone their towns and the optimal design of zoning. Cato and Matsumura (2017) show other models in which "whether the private firm is domestic or foreign often yields contrasting results in the literature on mixed oligopolies. See Corneo and Jeanne (1994), Fjell and 5 Bárcena-Ruiz and Casado-Izaga (2017) point out that zoning costs are meaningful because "there are costs linked to studying regulation, to designing the maps that plot the different uses of different areas in the town, to uploading those maps and regulations to the web site that offers the information; and there are costs for the staff who inform about and watch for non-fulfillment of the norms, to mention just a few.…”

Section: Introductionmentioning

confidence: 88%

Partial ownership of local firms and zoning of neighboring towns

Bárcena‐Ruiz

Casado-Izaga

2020

Ann Reg Sci

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This paper investigates zoning in two neighboring towns in which firms are owned by investors that reside in the two towns. We find that local regulators use zoning strategically depending on the weight of local profits in social welfare. When they are high enough both towns are zoned. For intermediate values an asymmetric result emerges: only one regulator resorts to zoning despite the symmetry in the percentage of ownership of the neighboring firms. For a low weight of local profits, towns may or may not be zoned. Zoning restrictions on the location of firms are tighter when local profits are more significant for social welfare. JEL Classification: L13. R32. R38.

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Section: Introductionmentioning

confidence: 88%

Partial ownership of local firms and zoning of neighboring towns

Bárcena‐Ruiz

Casado-Izaga

2020

Ann Reg Sci

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“…An inverted U-shaped result is quite common in a mixed oligopoly market, for example, seeCato and Matsumura (2019).…”

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confidence: 99%

Corporate social responsibility and tariff policy in a differentiated mixed duopoly

Wang,

Wang

2024

Bulletin of Econ Res

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In this paper, we assume that the domestic public firm competes in the market with a foreign private firm that cares about consumer surplus and the domestic government imposes tariffs on foreign firm. We aim to analyze the influence of the corporate social responsibility (CSR) level of foreign firm on privatization and tariff policy. It shows that if the government implements a privatization policy for the domestic public firm, the optimal degree of privatization decreases in the CSR level of foreign firm. Under the optimal privatization policy, if the product differentiation is relatively small, the equilibrium tariff increases in the CSR level; if the product differentiation is relatively large, the equilibrium tariff decreases in the CSR level; if the product differentiation is moderate, the relationship between the equilibrium tariff and CSR level is an inverted U‐shape. We further consider the policy implications under sequential moves of firms.

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“…Under entry restrictions, the optimal import tariff is strictly positive, but with free entry, it can be non-positive. In one related study, Cato and Matsumura (2019) investigated the optimal production tax and level of privatization in a free-entry mixed oligopoly. In the case of domestic private firms entering, except for the polarities of complete privatization and complete nationalization, the optimal production tax is strictly positive, and the optimal production tax has a nonlinear relationship with the level of privatization.…”

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confidence: 99%

Trade, industrial, and privatization policies with endogenous market structure

Chen,

Ko,

Lee

et al. 2024

The Manchester School

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This study finds that in an international mixed oligopoly at free entry equilibrium, social welfare under import tariff cum privatization is higher than output subsidy cum privatization, and the dual subsidy‐tariff policy cum privatization degenerates into a single tariff policy cum privatization. The reason is that an output subsidy or the dual subsidy‐tariff policy will incentivize domestic private firms to enter the free‐entry equilibrium. Thus, the number of domestic firms with free entry is excessive, and social welfare deteriorates. A privatization policy is pivotal in the long run and is still more effective than a single subsidy policy.

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Optimal Production Tax in a Mixed Market with an Endogenous Market Structure

Cited by 7 publications

References 27 publications

Partial ownership of local firms and zoning of neighboring towns

Partial ownership of local firms and zoning of neighboring towns

Corporate social responsibility and tariff policy in a differentiated mixed duopoly

Trade, industrial, and privatization policies with endogenous market structure

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