2020
DOI: 10.1007/s00168-019-00972-5
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Partial ownership of local firms and zoning of neighboring towns

Abstract: 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 … Show more

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Cited by 6 publications
(3 citation statements)
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“…A regulator biased towards consumers allows the two firms to locate in a central area of the city, while a regulator highly concerned about firms restricts them to locations outside the city boundaries. Bárcena‐Ruiz and Casado‐Izaga (2020) further investigate zoning in two neighboring towns in which firms are owned by investors that reside in the two towns. They find that local regulators use zoning strategically depending on the weight of local profits in social welfare.…”
Section: Introductionmentioning
confidence: 99%
“…A regulator biased towards consumers allows the two firms to locate in a central area of the city, while a regulator highly concerned about firms restricts them to locations outside the city boundaries. Bárcena‐Ruiz and Casado‐Izaga (2020) further investigate zoning in two neighboring towns in which firms are owned by investors that reside in the two towns. They find that local regulators use zoning strategically depending on the weight of local profits in social welfare.…”
Section: Introductionmentioning
confidence: 99%
“…The optimal zoning analysis under oligopoly competition was investigated using different frameworks, such as the Hotelling model(Lai and Tsai, 2004; Matsumura and Matsushima, 2011;, Cournot competition(Chen and Lai, 2008; Colombo, 2012), circular model (Hamondi and Risueno, 2012), and connected cities(Bárcena-Ruiz and Casado-Izaga, 2017, 2018, 2020.…”
mentioning
confidence: 99%
“…1 Under a private oligopoly the nationality of firms also influences the behaviour of regulators. In this regard, Bárcena-Ruiz and Casado-Izaga (2020) show that the nationality of firms influences the design of the optimal zoning of urban land by a regulator. Given the importance of the nationality of firms for the behaviour of regulators, we seek to analyse here whether the ownership structure of firms affects the decision by governments as to what environmental policy instruments to use to control pollution.…”
mentioning
confidence: 99%