Can cost asymmetry be a rationale for privatisation?
Cost asymmetries between the public and the private firms create a rationale for privatising the public firms. We show that this argument is restrictive, since it does not allow for other ways of reducing production inefficiency, which creates the motivation for privatisation. If the profit maximising private firm is technologically superior to that of the welfare maximising public firm, the society and the private firm benefit from technology licensing. Under technology licensing, both the equilibrium output of the private firm and the equilibrium degree of privatisation are zero. However, if cost asymmetry cannot be bridged by technology licensing due to costly and/or imperfect technology transfer, the argument in favour of privatisation remains.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 29 (2014)
Issue (Month): C ()
|Contact details of provider:|| Web page: http://www.elsevier.com/locate/inca/620165|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ishida, Junichiro & Matsushima, Noriaki, 2009.
"Should civil servants be restricted in wage bargaining? A mixed-duopoly approach,"
Journal of Public Economics,
Elsevier, vol. 93(3-4), pages 634-646, April.
- Junichiro Ishida & Noriaki Matsushima, 2006. "Should civil servants be restricted in wage bargaining? A mixed-duopoly approach," Discussion Papers 2006-07, Kobe University, Graduate School of Business Administration.
- Junichiro Ishida & Noriaki Matsushima, 2008. "Should civil servants be restricted in wage bargaining? A mixed-duopoly approach," Discussion Papers 2008-49, Kobe University, Graduate School of Business Administration.
- VISHWASRAO, Sharmila & GUPTA, Srabana & BENCHEKROUN, Hassan, 2004.
"Optimum Tariffs and Patent Length in a Model of North-South Technology Transfer,"
Cahiers de recherche
05-2004, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Vishwasrao, Sharmila & Gupta, Srabana & Benchekroun, Hassan, 2007. "Optimum tariffs and patent length in a model of North-South technology transfer," International Review of Economics & Finance, Elsevier, vol. 16(1), pages 1-14.
- Sharmila Vishwasrao & Srabana Gupta & Hassan Benchekroun, 2004. "Optimum tariffs and patent length in a model of North–South technology transfer," Working Papers 04022, Department of Economics, College of Business, Florida Atlantic University, revised May 2005.
- Fershtman, Chaim, 1990. "The Interdependence between Ownership Status and Market Structure: The Case of Privatization," Economica, London School of Economics and Political Science, vol. 57(227), pages 319-328, August.
- repec:ebl:ecbull:v:12:y:2007:i:3:p:1-6 is not listed on IDEAS
- Schmidt, Klaus M. & Schnitzer, Monika, .
"Methods of privatization: Auctions, bargaining, and giveaways,"
Chapters in Economics,
University of Munich, Department of Economics.
- Schmidt, Klaus M. & Schnitzer, Monika, 1997. "Methods of Privatization: Auctions, Bargaining and Give-Aways," CEPR Discussion Papers 1541, C.E.P.R. Discussion Papers.
- John Vickers & George Yarrow, 1991. "Economic Perspectives on Privatization," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 111-132, Spring.
- Bagchi, Aniruddha & Mukherjee, Arijit, 2014.
"Technology licensing in a differentiated oligopoly,"
International Review of Economics & Finance,
Elsevier, vol. 29(C), pages 455-465.
- Aniruddha Bagchi & Arijit Mukherjee, "undated". "Technology licensing in a differentiated oligopoly," Discussion Papers 10/16, University of Nottingham, School of Economics.
- Arijit Mukherjee, 2007. "Optimal licensing contract in an open economy," Economics Bulletin, AccessEcon, vol. 12(3), pages 1-6.
- Mukherjee, Arijit & Suetrong, Kullapat, 2009. "Privatization, strategic foreign direct investment and host-country welfare," European Economic Review, Elsevier, vol. 53(7), pages 775-785, October.
- Soumyananda Dinda & Arijit Mukherjee, 2011.
"International Outsourcing, Tax, and Patent Protection,"
Journal of Public Economic Theory,
Association for Public Economic Theory, vol. 13(1), pages 139-154, 02.
- Soumyananda Dinda & Arijit Mukherjee, "undated". "International Outsourcing, Tax and Patent Protection," Discussion Papers 08/46, University of Nottingham, GEP.
- Winston Chang, 2007. "Optimal trade, industrial, and privatization policies in a mixed duopoly with strategic managerial incentives," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 16(1), pages 31-52.
- Kangsik Choi, 2011. "Strategic Budget Constraints In A Unionized Mixed Oligopoly," The Japanese Economic Review, Japanese Economic Association, vol. 62(4), pages 504-516, December.
- Matsumura, Toshihiro, 1998. "Partial privatization in mixed duopoly," Journal of Public Economics, Elsevier, vol. 70(3), pages 473-483, December.
- Gelves, J. Alejandro & Heywood, John S., 2013. "Privatizing by merger: The case of an inefficient public leader," International Review of Economics & Finance, Elsevier, vol. 27(C), pages 69-79.
- Mujumdar, Sudesh & Pal, Debashis, 1998. "Effects of indirect taxation in a mixed oligopoly," Economics Letters, Elsevier, vol. 58(2), pages 199-204, February.
- Nandini Gupta, 2005. "Partial Privatization and Firm Performance," Journal of Finance, American Finance Association, vol. 60(2), pages 987-1015, 04.
- Mukherjee, Arijit & Tsai, Yingyi, 2013. "Multi-sourcing as an entry deterrence strategy," International Review of Economics & Finance, Elsevier, vol. 25(C), pages 108-112.
- Toshihiro Matsumura, 2003. "Endogenous Role in Mixed Markets: A Two-Production-Period Model," Southern Economic Journal, Southern Economic Association, vol. 70(2), pages 403-413, October.
- Pal, Debashis, 1998. "Endogenous timing in a mixed oligopoly," Economics Letters, Elsevier, vol. 61(2), pages 181-185, November.
- Pack, Howard & Saggi, Kamal, 2001. "Vertical technology transfer via international outsourcing," Journal of Development Economics, Elsevier, vol. 65(2), pages 389-415, August.
- Debashis Pal & Mark D. White, 1998. "Mixed Oligopoly, Privatization, and Strategic Trade Policy," Southern Economic Journal, Southern Economic Association, vol. 65(2), pages 264-281, October.
- Bibhas Saha & Rudra Sensarma, 2004. "Divestment and Bank Competition," Journal of Economics, Springer, vol. 81(3), pages 223-247, 03.
- Sanjo, Yasuo, 2013. "Country size and tax policy for international joint ventures in an integrated market," International Review of Economics & Finance, Elsevier, vol. 27(C), pages 37-53.
When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:29:y:2014:i:c:p:497-503. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dana Niculescu)
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.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.