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Privatization in the presence of foreign competition and strategic policies

Dijkstra, Bouwe; Mathew, Anuj; Mukherjee, Arijit

Authors

Anuj Mathew



Abstract

Recent evidence shows that developing and transition economies are increasingly privatizing their public firms and also experiencing rapid growth of inward foreign direct investment (FDI). In an international mixed oligopoly with strategic tax/subsidy policies, we analyze the interaction between privatization and FDI. We find that the incentive for FDI increases with privatization. However, the possibility of FDI reduces the degree of privatization. Our paper shows that FDI policies reducing the fixed-cost of undertaking FDI may need to complement the privatization policies to attract FDI and to improve domestic welfare.

Journal Article Type Article
Publication Date Jun 19, 2014
Journal Journal of Economics
Print ISSN 0976-5239
Electronic ISSN 0931-8658
Publisher Kamla-Raj Enterprises
Peer Reviewed Peer Reviewed
Volume 114
Issue 3
APA6 Citation Dijkstra, B., Mathew, A., & Mukherjee, A. (2014). Privatization in the presence of foreign competition and strategic policies. Journal of Economics, 114(3), doi:10.1007/s00712-014-0407-3
DOI https://doi.org/10.1007/s00712-014-0407-3
Publisher URL http://link.springer.com/article/10.1007/s00712-014-0407-3
Copyright Statement Copyright information regarding this work can be found at the following address: http://eprints.nottingh.../end_user_agreement.pdf

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Copyright Statement
Copyright information regarding this work can be found at the following address: http://eprints.nottingham.ac.uk/end_user_agreement.pdf





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