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To favor more or less? Corporate lobbying over preferential treatment to state-owned enterprises

Author

Listed:
  • Dapeng Cai

    (Nanzan University)

  • Jie Li

    (Jinan University)

Abstract

In OECD and many other countries, state-owned public enterprises normally receive various forms of exclusive preferential treatment that directly affect the profits of all firms, motivating firms to lobby politicians. Using the common agency approach, we show that when state ownership of public enterprises is sufficiently low, i.e., the privatization process is sufficiently advanced, corporate lobbying boosts preferential treatment, causing public enterprises to “advance” as the playing field is tilted in their favor. Conversely, when state ownership is high, corporate lobbying can reduce preferential treatment, causing public enterprises to “retreat” as the playing field levels.

Suggested Citation

  • Dapeng Cai & Jie Li, 2019. "To favor more or less? Corporate lobbying over preferential treatment to state-owned enterprises," Journal of Regulatory Economics, Springer, vol. 55(3), pages 334-357, June.
    • Handle: RePEc:kap:regeco:v:55:y:2019:i:3:d:10.1007_s11149-019-09388-7
    DOI: 10.1007/s11149-019-09388-7
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    More about this item

    Keywords

    Corporate lobbying; Preferential treatment; Public enterprises; Common agency game; Privatization;
    All these keywords.

    JEL classification:

    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • P20 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - General

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