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Corporate social responsibility and privatization policy in a mixed oligopoly

  • Seung-Leul Kim
  • Sang-Ho Lee
  • Toshihiro Matsumura
Article
  • 44 Downloads

Abstract

This article formulates a mixed oligopoly in which a public firm competes with two private firms that may adopt corporate social responsibility (CSR). We then determine the optimal privatization policy and find that, depending on CSR level and cost differences among firms, either nationalization or full privatization can be optimal. For identical cost functions, we also show the optimal degree of privatization is decreasing with the level of CSR if private firms are homogeneous, while it is non-monotone with the CSR level in a significant heterogeneity of objectives among the firms. Our analysis suggests that CSR activities that affect the magnitude of heterogeneity among firms are crucial in choosing an optimal privatization policy in a mixed oligopoly.

Keywords

Corporate social responsibility Mixed oligopoly Partial privatization Nationalization Full privatization 

JEL Classification

L13 D45 H23 

Notes

Acknowledgements

This paper was supported by Wonkwang university in 2018.

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Copyright information

© Springer-Verlag GmbH Austria, part of Springer Nature 2019

Authors and Affiliations

  1. 1.Wonkwang UniversityIksanRepublic of Korea
  2. 2.Chonnam National UniversityGwangjuRepublic of Korea
  3. 3.The University of TokyoTokyoJapan

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