When Do State-Owned Firms Crowd Out Private Investment?
AbstractThis note examines the conditions under which a state-owned firm with a political agenda crowds out investment by a private firm. We show that crowding out occurs if the private firm regards investments as strategic substitutes and private investment is undesirable from the state-owned firm's perspective.
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Bibliographic InfoPaper provided by University of St. Gallen, School of Economics and Political Science in its series Economics Working Paper Series with number 1209.
Length: 13 pages
Date of creation: Mar 2012
Date of revision:
Public investment; crowding out; political agenda;
Find related papers by JEL classification:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-28 (All new papers)
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