of firms, Believers, who take the tax announcements made by the Regulator to face value, and Non-Believers, who perfectly … on the relative profits of both groups. We show that the Regulator can use misleading tax announcements to steer the …

place. -- Strategic environmental policy ; policy diffusion ; emission tax …

Policy diffusion refers to the process by which a political innovation like the introduction of a novel emission tax … simultaneous decision making we consider a Stackelberg game: In the first step the domestic government introduces an emission tax … emission tax tf and in the third step the firms decide on their output quantities to be sold on a third country’s market. For …

show that the country attracting FDI introduces a Pigouvian environmental tax, whereas the country served by the local firm … only levies a smaller tax rate. Hence, FDI does not lead to ecological dumping. With regard to welfare, we show that the …