Green transformation in oligopoly markets under common ownership

Abstract

This study conducts a theoretical investigation on how common ownership (or the extent of cooperation in an industry) affects firms’ incentives to adopt green sources in an oligopoly. The findings show that common ownership hinders the switch from brown to green sources in two ways. First, an increase in the degree of common ownership reduces a firm’s incentive to adopt green sources. Second, an increase in the degree of common ownership induces a production substitution from green to brown firms. Both these effects reduce the share of green sources.