Privatization and competition in the delivery of local services: An empirical examination of the dual market hypothesis
AbstractThis paper empirically analyses the hypothesis of the existence of a dual market for contracts in local services. Large firms that operate on a national basis control the contracts for delivery in the most populated and/or urban municipalities, whereas small firms that operate at a local level have the contracts in the least populated and/or rural municipalities. The dual market implies the high concentration and dominance of major firms in large municipalities, and local monopolies in the smaller ones. This market structure is harmful to competition for the market as the effective number of competitors is low across all municipalities. Thus, it damages the likelihood of obtaining cost savings from privatization.
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Bibliographic InfoPaper provided by Xarxa de Referència en Economia Aplicada (XREAP) in its series Working Papers with number XREAP2008-04.
Length: 35 pages
Date of creation: Apr 2008
Date of revision: Apr 2008
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Postal: Espai de Recerca en Economia, Facultat de Ciències Econòmiques i Empresarials, Universitat de Barcelona, c/ Tinent Coronel Valenzuela, 1-11, 08034 Barcelona
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Competition; Concentration; Local Services; Privatization.;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2008-04-29 (All new papers)
- NEP-COM-2008-04-29 (Industrial Competition)
- NEP-MIC-2008-04-29 (Microeconomics)
- NEP-URE-2008-04-29 (Urban & Real Estate Economics)
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