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Leonard F.S. Wang, Tai-Liang Chen and Ya-Chin Wang
''Trade liberalization and environmental tax in differentiated oligopoly with consumption externalities''
( 2007, Vol. 17 No.9 )
This paper investigates the environment tax and trade liberalization with different market structures (pure oligopoly or mixed oligopoly) juxtaposing the substitutability of the goods (homogenous goods and differentiated goods), wherein environmental damage is associated with consumption. It shows that the environmental tax in mixed oligopoly is higher than in pure oligopoly irrespective of the properties of goods. In addition, it demonstrates that when the domestic market increases its openings, the tariff reduction does not always bring positive effects on the environment in mixed oligopoly but, in pure oligopoly with homogeneous goods, the tariff reduction is bad for the environment.
JEL: Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics: General
F1 - Trade: General
Manuscript Received : Aug 27 2007 Manuscript Accepted : Oct 03 2007

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