| Summary: | 碩士 === 嶺東科技大學 === 國際企業研究所 === 102 === As the global economy rapidly expands, environmental issues and problems were increasingly gaining people’s attention. Market failure caused by the external environmental costs was the result of conflict between trade and the environment. The governments of every country were opting for environmental regulations to control pollution. Environmental regulations encountered in the global markets also becomes the focus of many corporations. How, under environmental regulations, realizing the goal of environmental protection while at the same time maximizing profits and increasing corporate competitiveness have become the most important lessons for us. Therefore, this study utilizes methods such as the Game theory of economic studies, from the point of view of supply chains, to inspect and analyze, under global environment regulation, the strategic choices of upstream and downstream corporations with vertically integrated market structure, and at the same time revise Hamilthon and Rerquate (2004)’s model, to connect environmental regulation, industry structure and global trade, to inspect the market competition of domestic and foreign downstream corporations in third world markets, and introduce vertical agreements amongst downstream corporations, while at the same time dividing the discussion between quantity competition and price competition. Studies found that when one single polluted product is used to produce multiple export products, vertical agreements should be used for control; for imports, the most suitable environmental regulation policy was to collect Pigouvian Taxes. Thus, the introduction of vertical agreements makes it unnecessary for governments to utilize traditional strategic trade policies, export countries also do not need to interfere with the market by adopting export policies such as subsidies, but rather completely change economic behaviors and interactions between corporations, while at the same time reducing distortions from economic operations.
Key words: Environmental Regulation, Strategic Trade Policies, Supply Chain, Game Theory.
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