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Privatization Waves

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  • TOSHIHIRO MATSUMURA
  • DAISUKE SHIMIZU

Abstract

We investigate a mixed economy where state‐owned public enterprises compete against private firms. We examine sequential privatization of public enterprises, and find that under plausible assumptions one privatization increases the welfare gains of the subsequent privatizations. Thus, even if privatization does not improve welfare at the early stages, it can eventually lead to a point such that privatizations after that point are beneficial to the society and the privatization program ends up with a success.

Suggested Citation

  • Toshihiro Matsumura & Daisuke Shimizu, 2010. "Privatization Waves," Manchester School, University of Manchester, vol. 78(6), pages 609-625, December.
  • Handle: RePEc:bla:manchs:v:78:y:2010:i:6:p:609-625
    DOI: 10.1111/j.1467-9957.2009.02147.x
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