TY - JOUR
T1 - Environmental policy helping antitrust decisions
T2 - Socially excessive and insufficient merger approvals
AU - Choi, Pak Sing
AU - Espínola-Arredondo, Ana
AU - Muñoz-García, Félix
N1 - Publisher Copyright:
© 2021 Elsevier B.V.
PY - 2022/2
Y1 - 2022/2
N2 - This paper considers firms’ incentives to merge under imperfect competition, where we allow for product differentiation, cost asymmetries, and pollution intensities (green and brown goods). We first analyze mergers in the absence of environmental regulation, showing that mergers induce an output shift towards the lowest cost firm. When emission fees are introduced, however, firms also consider their relative pollution intensities, potentially reverting the above output shift. We show that socially excessive mergers can arise when firms shift output to the more cost-efficient firm which may cause more pollution. In contrast, socially insufficient mergers can arise if output shifts reduce pollution.
AB - This paper considers firms’ incentives to merge under imperfect competition, where we allow for product differentiation, cost asymmetries, and pollution intensities (green and brown goods). We first analyze mergers in the absence of environmental regulation, showing that mergers induce an output shift towards the lowest cost firm. When emission fees are introduced, however, firms also consider their relative pollution intensities, potentially reverting the above output shift. We show that socially excessive mergers can arise when firms shift output to the more cost-efficient firm which may cause more pollution. In contrast, socially insufficient mergers can arise if output shifts reduce pollution.
KW - Antitrust authorities
KW - Cost asymmetry
KW - Emission fees
KW - Environmental regulation
KW - Pollution intensity
KW - Product differentiation
KW - Socially excessive/insufficient mergers
UR - http://www.scopus.com/inward/record.url?scp=85122494111&partnerID=8YFLogxK
U2 - 10.1016/j.reseneeco.2021.101267
DO - 10.1016/j.reseneeco.2021.101267
M3 - 期刊論文
AN - SCOPUS:85122494111
SN - 0928-7655
VL - 67
JO - Resource and Energy Economics
JF - Resource and Energy Economics
M1 - 101267
ER -