Abstract
This paper investigates how the presence of foreign investors in privatized firms affects privatization policy in a mixed oligopoly. We find that an increase in the stockholding ratio of foreign investors in a privatized firm increases the optimal degree of privatization, whereas an increase in the penetration of foreign firms in product markets reduces it. These results imply that the degree of openness of financial markets and that of product markets have contrasting implications for the optimal privatization policy.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
References
Bárcena-Ruiz JC (2007) Endogenous timing in a mixed duopoly: price competition. J Econ 91(3): 263–272
Bárcena-Ruiz JC, Garzón MB (2003) Mixed duopoly, merger and multiproduct firms. J Econ 80(1): 27–42
Bárcena-Ruiz JC, Garzón MB (2005a) Economic integration and privatization under diseconomies of scale. Eur J Polit Econ 21(1): 247–267
Bárcena-Ruiz JC, Garzón MB (2005b) International trade and strategic privatization. Rev Dev Econ 9(4): 502–513
Chang WW (2005) Optimal trade and privatization policies in an international duopoly with cost asymmetry. J Int Trade Econ Dev 14(1): 19–42
Chao C-C, Yu ESH (2006) Partial privatization, foreign competition, and optimum tariff. Rev Int Econ 14(1): 87–92
Corneo G, Jeanne O (1994) Oligopole mixte dans un marché commun. Annales d’Economie et de Statistique 33: 73–90
Dadpay A, Heywood JS (2006) Mixed oligopoly in a single international market. Aust Econ Pap 45(4): 269–280
De Fraja G, Delbono F (1989) Alternative strategies of a public enterprise in oligopoly. Oxf Econ Pap 41(2): 302–311
Fjell K, Heywood JS (2002) Public Stackelberg leadership in a mixed oligopoly with foreign firms. Aust Econ Pap 41(3): 267–281
Fjell K, Pal D (1996) A mixed oligopoly in the presence of foreign private firms. Can J Econ 29(3): 737–743
Fujiwara K (2006) Trade patterns in an international mixed oligopoly. Econ Bull 6(9): 1–7
Fujiwara K (2007) Partial privatization in a differentiated mixed oligopoly. J Econ 92(1): 51–65
Gil-Moltó MJ, Poyago-Theotoky J (2008) Flexible versus dedicated technology adoption in the presence of a public firm. Southern Econ J 74(4): 997–1016
Han L, Ogawa H (2007) Partial privatization and market opening policies: a mixed oligopoly approach. Economic Research Center (Nagoya University), Discussion paper, No. E07-3
Han L, Ogawa H (2008) Economic integration and strategic privatization in an international mixed oligopoly. FinanzArchiv 64(3): 352–363
Heywood JS, Ye G (2009a) Delegation in a mixed oligopoly: the case of multiple private firms. Manag Decis Econ 30(2): 71–82
Heywood JS, Ye G (2009b) Mixed oligopoly and spatial price discrimination with foreign firms. Reg Sci Urban Econ 39(5): 592–601
Heywood JS, Ye G (2009c) Partial privatization in a mixed duopoly with R&D rivalry. Bull Econ Res 61(2): 165–178
Ino H, Matsumura T (2010) What role should public enterprises play in free-entry markets?. J Econ 101(3): 213–230
Inoue T, Kamijo Y, Tomaru Y (2009) Interregional mixed duopoly. Reg Sci Urban Econ 39(2): 233–242
Ishida J, Matsushima N (2009) Should civil servants be restricted in wage bargaining? A mixed-duopoly approach. J Public Econ 93(3–4): 634–646
Kato K (2006) Can allowing to trade permits enhance welfare in mixed oligopoly?. J Econ 88(3): 263–283
Long NV, Stähler F (2009) Trade policy and mixed enterprises. Can J Econ 42(2): 590–614
Lu Y (2006) Endogenous timing in a mixed oligopoly with foreign competitors: the linear demand case. J Econ 88(1): 49–68
Lu Y, Poddar S (2007) Firm ownership, product differentiation and welfare. Manch School 75(2): 210–217
Matsumura T (1998) Partial privatization in mixed duopoly. J Public Econ 70(3): 473–483
Matsumura T (2003a) Endogenous role in mixed markets: a two-production-period model. Southern Econ J 70(2): 403–413
Matsumura T (2003b) Stackelberg mixed duopoly with a foreign competitor. Bull Econ Res 55(3): 275–288
Matsumura T, Kanda O (2005) Mixed oligopoly at free entry markets. J Econ 84(1): 27–48
Matsumura T, Ogawa A (2010) On the robustness of private leadership in mixed duopoly. Aust Econ Pap 49(2): 149–160
Matsumura T, Shimizu D (2010) Privatization Waves. Manch School 78(6): 609–625
Matsumura T, Tomaru Y (2011) Market structure and privatization policy under international competition. Jpn Econ Rev (forthcoming)
Matsumura T, Matsushima N, Ishibashi I (2009) Privatization and entries of foreign enterprises in a differentiated industry. J Econ 98(3): 203–219
Matsushima N, Matsumura T (2006) Mixed oligopoly, foreign firms, and location choice. Reg Sci Urban Econ 36(6): 753–772
Méndez-Naya J (2008) Merger profitability in mixed oligopoly. J Econ 94(2): 167–176
Merrill W, Schneider N (1966) Government firms in oligopoly industries: a short-run analysis. Q J Econ 80(3): 400–412
Mukherjee A, Suetrong K (2009) Privatization, strategic foreign direct investment and host-country welfare. Eur Econ Rev 53(7): 775–785
Ohori S (2006) Optimal environmental tax and level of privatization in an international duopoly. J Regul Econ 29(2): 225–233
Pal D (1998) Endogenous timing in a mixed oligopoly. Econ Lett 61: 181–185
Pal D, White MD (1998) Mixed oligopoly, privatization, and strategic trade policy. Southern Econ J 65(2): 264–281
Tomaru Y (2006) Mixed oligopoly, partial privatization and subsidization. Econ Bull 12(5): 1–6
Wang LFS, Chen T-L (2010) Do cost efficiency gap and foreign competitors matter concerning optimal privatization policy at the free entry market?. J Econ 100(1): 33–49
Wang LFS, Wang Y-C, Zhao L (2009) Privatization and efficiency gain in an international mixed oligopoly with asymmetric costs. Jpn Econ Rev 60(4): 539–559
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Lin, M.H., Matsumura, T. Presence of foreign investors in privatized firms and privatization policy. J Econ 107, 71–80 (2012). https://doi.org/10.1007/s00712-011-0254-4
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s00712-011-0254-4