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Relocation and public ownership of firms

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  • Brcena-Ruiz, Juan Carlos
  • Garzn, Mara Begoa

Abstract

This paper studies how the structure of markets in advanced countries is affected by the relocation of domestic firms to countries where wage costs are lower. We consider that private firms compete in the product market with firms partly owned by the government (semipublic firms). Assuming a mixed duopoly, we obtain the counterintuitive result that, for a certain range of values of the parameters of the model, in equilibrium, only the semipublic firm relocates. Moreover, if only one firm changes its location, social welfare is greater if it is the semipublic firm that relocates. J. Japanese Int. Economies 23 (1) (2009) 71-85.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of the Japanese and International Economies.

Volume (Year): 23 (2009)
Issue (Month): 1 (March)
Pages: 71-85

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Handle: RePEc:eee:jjieco:v:23:y:2009:i:1:p:71-85

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Web page: http://www.elsevier.com/locate/inca/622903

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Keywords: Relocation Mixed duopoly Publicly-owned firms;

References

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  1. Magnus Blomstrom & Ari Kokko, 2003. "The Economics of Foreign Direct Investment Incentives," NBER Working Papers 9489, National Bureau of Economic Research, Inc.
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  13. Juan Bárcena-ruiz & María Garzón, 2003. "Strategic Environmental Standards, Wage Incomes and the Location of Polluting Firms," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 24(2), pages 121-139, February.
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Citations

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Cited by:
  1. Juan Bárcena-Ruiz & María Garzón, 2014. "Relocation and investment in R&D by firms," Portuguese Economic Journal, Springer, Springer, vol. 13(1), pages 25-38, April.
  2. Choi, Kangsik, 2009. "Government's Preference and Timing of Endogenous Wage Setting: Perspectives on Privatization and Mixed Duopoly," MPRA Paper 17221, University Library of Munich, Germany.
  3. Choi, Kangsik, 2010. "The Timing of Endogenous Wage Setting under Bertrand Competition in a Unionized Mixed Duopoly," MPRA Paper 20205, University Library of Munich, Germany.
  4. Joaquín Andaluz, 2011. "Validity of the “Principle of Maximum Product Differentiation” in a unionized mixed-duopoly," Journal of Economics, Springer, Springer, vol. 102(2), pages 123-136, March.
  5. Choi, Kangsik, 2012. "Indirect Taxation and Privatization in a Model of Government's Preference," MPRA Paper 42968, University Library of Munich, Germany.
  6. Choi, Kangsik, 2010. "Strategic Budget Constraints of Public Firm under Bertrand Competition of Unionized Mixed Duopoly," MPRA Paper 19969, University Library of Munich, Germany.
  7. Choi, Kangsik, 2013. "Unionized Mixed Oligopoly and Privatization with Excess Burden of Taxation," MPRA Paper 51156, University Library of Munich, Germany.

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