IDEAS home Printed from https://ideas.repec.org/a/bla/manchs/v87y2019i1p37-59.html

Dynamic Privatization Policy

Author

Listed:
  • Susumu Sato
  • Toshihiro Matsumura

Abstract

This study formulates a two‐period model of mixed oligopoly in which the government privatizes a state‐owned public firm over multiple periods. We introduce the shadow cost of public funding (i.e., the excess burden of taxation). The government is concerned about both the total surplus and the revenue obtained from the privatization of the public firm. We find that the government may or may not increase the degree of privatization over time depending on the competitiveness of the product market and nationality of private competitors. The government increases the degree of privatization over time if the product market is competitive and the foreign ownership share in private firms is low. Although it adjusts its privatization policy over time, this harms welfare. In addition, this distortion in the ex post incentive leads to too low a degree of privatization in the first period.

Suggested Citation

  • Susumu Sato & Toshihiro Matsumura, 2019. "Dynamic Privatization Policy," Manchester School, University of Manchester, vol. 87(1), pages 37-59, January.
    • Handle: RePEc:bla:manchs:v:87:y:2019:i:1:p:37-59
    DOI: 10.1111/manc.12217
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/manc.12217
    Download Restriction: no
    File URL: https://libkey.io/10.1111/manc.12217?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Junichi Haraguchi & Toshihiro Matsumura, 2020. "Implicit protectionism via state enterprises and technology transfer from foreign enterprises," Review of International Economics, Wiley Blackwell, vol. 28(3), pages 723-743, August.
    2. Qidi Zhang & Leonard F.S. Wang & Yapo Yang, 2020. "Indirect taxation with shadow cost of public funds in mixed oligopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(3), pages 415-425, April.
    3. Juan Carlos Bárcena-Ruiz & María Begoña Garzón, 2020. "Partial privatization in an international mixed oligopoly under product differentiation," Journal of Economics, Springer, vol. 131(1), pages 77-100, September.
    4. Juan Carlos Bárcena‐Ruiz & María Begoña Garzón, 2020. "Disclosure of R&D knowledge in a mixed duopoly," Manchester School, University of Manchester, vol. 88(4), pages 584-598, July.
    5. Haraguchi, Junichi & Matsumura, Toshihiro, 2018. "Multiple Long-Run Equilibria in a Free-Entry Mixed Oligopoly," MPRA Paper 86704, University Library of Munich, Germany.
    6. Junichi Haraguchi & Toshihiro Matsumura, 2020. "Endogenous public and private leadership with diverging social and private marginal costs," Manchester School, University of Manchester, vol. 88(5), pages 699-730, September.
    7. Haraguchi, Junichi & Matsumura, Toshihiro, 2020. "Lack of commitment to future privatization policies may lead to worst welfare outcome," Economic Modelling, Elsevier, vol. 88(C), pages 181-187.
    8. Yi Liu & Toshihiro Matsumura & Chenhang Zeng, 2021. "The relationship between privatization and corporate taxation policies," Journal of Economics, Springer, vol. 133(1), pages 85-101, June.
    9. Suzuka Okuyama, 2023. "Behavior‐based price discrimination in the domestic and international mixed duopoly," Manchester School, University of Manchester, vol. 91(5), pages 482-505, September.
    10. Haraguchi, Junichi & Matsumura, Toshihiro, 2020. "Common Ownership among Private Firms and Privatization Policies," MPRA Paper 102152, University Library of Munich, Germany.
    11. Quan Dong & Juan Carlos Bárcena-Ruiz, 2021. "Corporate social responsibility and partial privatisation of state holding corporations," Journal of Economics, Springer, vol. 132(3), pages 223-250, April.
    12. Xia Wang & Tingting Tan & Mingqing Xing, 2022. "Environmental awareness of the private firm and optimal privatization in a mixed duopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(8), pages 4055-4063, December.
    13. Sato, Susumu & Matsumura, Toshihiro, 2019. "Shadow cost of public funds and privatization policies," The North American Journal of Economics and Finance, Elsevier, vol. 50(C).
    14. Akio Kawasaki & Takao Ohkawa & Makoto Okamura, 2022. "Optimal partial privatization in an endogenous timing game: a mixed oligopoly approach," Journal of Economics, Springer, vol. 136(3), pages 227-250, August.
    15. Liu, Yi & Tan, Yu & Fang, Yu, 2019. "Innovation spillover, licensing, and ex-post privatization in international duopoly," MPRA Paper 95467, University Library of Munich, Germany.
    16. Ming Hsin Lin & Toshihiro Matsumura, 2018. "Optimal Privatisation Policy under Private Leadership in Mixed Oligopolies," Arthaniti: Journal of Economic Theory and Practice, , vol. 17(1), pages 1-14, June.
    17. Sato, Susumu & Matsumura, Toshihiro, 2018. "Flexible Privatization Policy in Free-Entry Markets," MPRA Paper 88444, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:manchs:v:87:y:2019:i:1:p:37-59. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/semanuk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.