Gresham's law in environmental protection

Ya Po Yang; Jin-Li Hu

doi:10.1007/s10018-011-0025-z

Gresham's law in environmental protection

Ya Po Yang, Jin-Li Hu

Institute of Business and Management

Research output: Contribution to journal › Article › peer-review

3 Scopus citations

Abstract

Under incomplete environmental enforcement, the high-cost (less efficient) firm may strategically violate the environmental standard, causing the low-cost (more efficient) firm to exit the market-a phenomenon similar to Gresham's law in which bad money drives out good money. Tightening environmental regulation without increasing probability and penalties helps the high-cost firm to drive the low-cost firm out of the market. This explains why serious pollution and inefficient production co-exist in developing economies.

Original language	English
Pages (from-to)	103-122
Number of pages	20
Journal	Environmental Economics and Policy Studies
Volume	14
Issue number	2
DOIs	https://doi.org/10.1007/s10018-011-0025-z
State	Published - Apr 2012

Keywords

Detection probability
Gresham's law
Incomplete environmental enforcement
Penalties

Access to Document

10.1007/s10018-011-0025-z

Cite this

@article{86b6892ec30c40bc919f420d8a30fe9b,

title = "Gresham's law in environmental protection",

abstract = "Under incomplete environmental enforcement, the high-cost (less efficient) firm may strategically violate the environmental standard, causing the low-cost (more efficient) firm to exit the market-a phenomenon similar to Gresham's law in which bad money drives out good money. Tightening environmental regulation without increasing probability and penalties helps the high-cost firm to drive the low-cost firm out of the market. This explains why serious pollution and inefficient production co-exist in developing economies.",

keywords = "Detection probability, Gresham's law, Incomplete environmental enforcement, Penalties",

author = "Yang, {Ya Po} and Jin-Li Hu",

year = "2012",

month = apr,

doi = "10.1007/s10018-011-0025-z",

language = "English",

volume = "14",

pages = "103--122",

journal = "Environmental Economics and Policy Studies",

issn = "1432-847X",

publisher = "Springer Japan",

number = "2",

}

TY - JOUR

T1 - Gresham's law in environmental protection

AU - Yang, Ya Po

AU - Hu, Jin-Li

PY - 2012/4

Y1 - 2012/4

N2 - Under incomplete environmental enforcement, the high-cost (less efficient) firm may strategically violate the environmental standard, causing the low-cost (more efficient) firm to exit the market-a phenomenon similar to Gresham's law in which bad money drives out good money. Tightening environmental regulation without increasing probability and penalties helps the high-cost firm to drive the low-cost firm out of the market. This explains why serious pollution and inefficient production co-exist in developing economies.

AB - Under incomplete environmental enforcement, the high-cost (less efficient) firm may strategically violate the environmental standard, causing the low-cost (more efficient) firm to exit the market-a phenomenon similar to Gresham's law in which bad money drives out good money. Tightening environmental regulation without increasing probability and penalties helps the high-cost firm to drive the low-cost firm out of the market. This explains why serious pollution and inefficient production co-exist in developing economies.

KW - Detection probability

KW - Gresham's law

KW - Incomplete environmental enforcement

KW - Penalties

UR - http://www.scopus.com/inward/record.url?scp=84859109495&partnerID=8YFLogxK

U2 - 10.1007/s10018-011-0025-z

DO - 10.1007/s10018-011-0025-z

M3 - Article

AN - SCOPUS:84859109495

SN - 1432-847X

VL - 14

SP - 103

EP - 122

JO - Environmental Economics and Policy Studies

JF - Environmental Economics and Policy Studies

IS - 2

ER -

Gresham's law in environmental protection

Abstract

Keywords

Access to Document

Other files and links

Fingerprint

Cite this