Mixed oligopoly, foreign penetration and China's environmental policy: a research based on mixed oligopoly model

This paper analyzes how the foreign penetration affects China's environment policy in a mixed oligopoly framework, and gets several interesting conclusions. First, our result shows that government should strengthen the degree of environmental policy along with increasing proportion of domestic ownership of multinational firms. Second, we show that an increase in domestic ownership of multinational firms raises not only domestic private firms' profit but also public firm's profit as well as social welfare. Third, the government will raise the environmental tax to control environmental damage.

Mixed oligopoly,foreign penetration,and environmental taxes

This paper examines the impact of foreign penetration on the public firm in a mixed oligopolistic market. Through the establishment of a mixed double oligopoly market, this paper analyzes how the share of foreign investment affects the environmental policy, the pollutant emission, and the social welfare under the condition of the state tax. The results show that: first, the introduction of foreign investment has some crowding-out effects on the social level of output. Second, the entry of foreign investment increases the profit of the public firm by a large margin, and the maximum profit of the private firm has been reduced. Third, the increase of foreign investment in public firm does not necessarily improve the environment.

Mixed oligopoly,state-owned banks’shareholding reform and foreign capital penetration

This paper examines the impact of the policy on eliminating the ratio of foreign shareholding in banks in a mixed oligopoly model.Its analytic results show that state-owned banks should encourage privatisation along with an increasing proportion of the domestic share in multinational banks.Furthermore,we argue that the increase in domestic stockholding of multinational banks raises domestic private firms’profits but decreases their social welfare in the deposit market.The results of numerical simulation show that when the quantity of private banks is fixed,foreign banks tend to enlarge their stake and strengthen their controlling power.

Optimal privatisation,and optimum-welfare and maximum-revenue tariffs

We examine the effect of privatisation on the priority of the maximum-revenue tariff and the optimum-welfare tariff in an international mixed oligopoly with foreign competition and optimal privatisation.We demonstrate that when the marginal cost of the domestic privatised firm is high enough,the optimumwelfare tariff will exceed the maximum-revenue tariff.Moreover,due to the higher tariff rate that leads to the high degree of privatisation,the optimum-welfare tariff generates greater optimal privatisation than the maximum-revenue tariff does.Lastly,when the gap between the number of domestic private firms and that of their foreign counterparts becomes larger,the optimum-welfare tariff will exceed the maximum-revenue tariff.