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Strategic privatization in a mixed duopoly with a socially responsible firm

Author

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  • Kadohognon sylvain Ouattara

    (ESDES The Business School of Ucly (Université Catholique de Lyon))

Abstract

This paper examines the impact of Corporate Social Responsibility (CSR) on privatization in a mixed duopoly consisting of one public firm and one Socially Responsible firm (SR firm). Two types of ownership of the SR firm are considered: (D) the SR firm is owned by domestic private investors and (F) it is owned by foreign private investors. Our model suggests that when considering the extent of privatization, the policy makers should account for two influences: the level of CSR and the nationality of the SR firm. Our results show that government should decrease the degree of privatization if the level of CSR increases. Furthermore, if the level of CSR is high enough, the optimal degree of privatization in an international mixed duopoly is higher than that obtained in a domestic mixed duopoly. This is in contrast to the standard mixed duopoly without CSR activities.

Suggested Citation

  • Kadohognon sylvain Ouattara, 2017. "Strategic privatization in a mixed duopoly with a socially responsible firm," Economics Bulletin, AccessEcon, vol. 37(3), pages 2067-2075.
    • Handle: RePEc:ebl:ecbull:eb-17-00287
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Chokri Aloui & Khaïreddine Jebsi, 2022. "Does corporate social responsibility solve the chicken‐and‐egg problem for a two‐sided platform?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(7), pages 3235-3256, October.
    2. Zhang, Qidi & Wang, Leonard F.S., 2022. "Corporate social responsibility, entry and optimal privatization in an international mixed market," International Review of Economics & Finance, Elsevier, vol. 77(C), pages 14-24.
    3. Xu, Lili & Lee, Sang-Ho, 2020. "Strategic Relations between Corporate Social Responsibility and Partial Privatization Policy with Foreign Penetration," MPRA Paper 100770, University Library of Munich, Germany.
    4. Wen, Jun & Diao, Yu & Wang, Leonard F. S. & Sun, Ji, 2022. "Privatization, entry and corporate social responsibility with consumer cognition," MPRA Paper 115169, University Library of Munich, Germany.
    5. Leal, Mariel & Garcia, Arturo & Lee, Sang-Ho, 2020. "Strategic CSR and merger in multiproduct mixed markets with state-holding corporation," MPRA Paper 102351, University Library of Munich, Germany, revised 10 Aug 2020.
    6. Ohnishi, Kazuhiro, 2023. "Why firms should care for consumers: Complementary goods," MPRA Paper 117305, University Library of Munich, Germany.
    7. Seung-Leul Kim & Sang-Ho Lee & Toshihiro Matsumura, 2019. "Corporate social responsibility and privatization policy in a mixed oligopoly," Journal of Economics, Springer, vol. 128(1), pages 67-89, September.
    8. Lisa Planer-Friedrich & Marco Sahm, 2018. "Why Firms Should Care for All Consumers," Economics Bulletin, AccessEcon, vol. 38(3), pages 1603-1612.
    9. Quan Dong & Juan Carlos Bárcena-Ruiz, 2021. "Corporate social responsibility and partial privatisation of state holding corporations," Journal of Economics, Springer, vol. 132(3), pages 223-250, April.
    10. Kadohognon sylvain Ouattara & Ahmed haidara Ould abdessalam, 2019. "The decision to hire managers in the presence of public and CSR firms," Economics Bulletin, AccessEcon, vol. 39(4), pages 2517-2526.
    11. Lili Xu & Fanrui Su & Sang-Ho Lee, 2023. "Strategic corporate social responsibility and partial privatization policy with foreign penetration," The Japanese Economic Review, Springer, vol. 74(2), pages 251-278, April.
    12. Leal, Mariel & García, Arturo & Lee, Sang-Ho, 2021. "Strategic CSR and merger decisions in multiproduct mixed markets with state-holding corporation," International Review of Economics & Finance, Elsevier, vol. 72(C), pages 319-333.
    13. Akio Kawasaki, 2023. "Pricing Strategies and Partial Privatization Policy," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 62(3), pages 293-319, May.
    14. Xingtang Wang & Leonard F. S. Wang, 2022. "Corporate social responsibility, vertical product differentiation, and privatization policy," The Japanese Economic Review, Springer, vol. 73(2), pages 403-425, April.

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    More about this item

    Keywords

    Corporate social responsibility; Partial privatization; Cournot competition; Social welfare;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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