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Keeping Mobile Firms at Home: The Role of Public Enterprise

Author

Listed:
  • Fjell Kenneth

    (NHH Norwegian School of Economics, Bergen, Norway)

  • Heywood John S.

    (University of Wisconsin-Milwaukee, Milwaukee, USA)

  • Pal Debashis

    (University of Cincinnati, Cincinnati, USA)

Abstract

We show that the presence of a public firm can deter private firms from relocating to foreign countries in response to high domestic taxation. We also examine partially privatized public firms showing that the higher the exogenous domestic profit tax, the larger the public ownership share needs to be to deter private firm mobility. We illustrate that deterring mobility increases domestic welfare.

Suggested Citation

  • Fjell Kenneth & Heywood John S. & Pal Debashis, 2024. "Keeping Mobile Firms at Home: The Role of Public Enterprise," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 24(2), pages 659-671, April.
  • Handle: RePEc:bpj:bejeap:v:24:y:2024:i:2:p:659-671:n:12
    DOI: 10.1515/bejeap-2023-0350
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    More about this item

    Keywords

    international mobility; mixed oligopoly; partial privatization; domestic welfare; L13; L33;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Comparison of Public and Private Enterprise and Nonprofit Institutions; Privatization; Contracting Out

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