Birg, Laura; Voßwinkel, Jan S. - In: European Journal of Law and Economics 51 (2021) 2, pp. 297-345
This paper studies the effect of an emission tax on the relocation decision in a duopoly with vertical product … differentiation. We establish the relationship between an exogenous product quality markup, relocation cost, and emission taxation in … competition makes firm relocation more likely, which results in emission shifting instead of emission reduction. The higher the …