IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Privatization, Efficiency Gap, and Subsidization with Excess Taxation Burden

  • Wang F.S., Leonard
  • Chen, Tai-Liang

It is well recognized that the impact of subsidization/taxation policies hinges on the market structure to which they apply. We show that different degree of efficiency gain sharply changes the comparisons of optimal subsidy, total outputs and social welfare between mixed and private duopoly. What is more, for an imposition of an optimal subsidy, welfare may increase, decrease, or remain unchanged with privatization, which depends on the level of the cost efficiency gap and the taxation burden. However, it may be possible to raise welfare through privatization as long as the efficiency gain prevails or no excess taxation burden exists. Government sets higher subsidy to stimulate firms' production if the value of cost-differential is assured.

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.

File URL: http://hermes-ir.lib.hit-u.ac.jp/rs/bitstream/10086/19217/1/HJeco0520100550.pdf
Download Restriction: no

Article provided by Hitotsubashi University in its journal Hitotsubashi Journal of Economics.

Volume (Year): 52 (2011)
Issue (Month): 1 (June)
Pages: 55-68

as
in new window

Handle: RePEc:hit:hitjec:v:52:y:2011:i:1:p:55-68
Contact details of provider: Phone: +81-42-580-8000
Web page: http://www.econ.hit-u.ac.jp/

More information through EDIRC

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.:

as in new window
  1. repec:ebl:ecbull:v:12:y:2002:i:1:p:1-6 is not listed on IDEAS
  2. repec:ebl:ecbull:v:12:y:2006:i:5:p:1-6 is not listed on IDEAS
  3. Juan Carlos Bárcena-Ruiz & María Begoña Garzón, 2005. "International Trade and Strategic Privatization," Review of Development Economics, Wiley Blackwell, vol. 9(4), pages 502-513, November.
  4. Shinichi Nishiyama & Kent Smetters, 2005. "Does Social Security Privatization Produce Efficiency Gains?," NBER Working Papers 11622, National Bureau of Economic Research, Inc.
  5. Toshihiro Matsumura & Yoshihiro Tomaru, 2013. "Mixed duopoly, privatization, and subsidization with excess burden of taxation," Canadian Journal of Economics, Canadian Economics Association, vol. 46(2), pages 526-554, May.
  6. Richard Diamond, 2008. "Privatization and The Definition of Subsidy: A Critical Study of Appellate Body Texturalism," Journal of International Economic Law, Oxford University Press, vol. 11(3), pages 649-678, September.
  7. Bai, Chong-En & Lu, Jiangyong & Tao, Zhigang, 2009. "How does privatization work in China?," Journal of Comparative Economics, Elsevier, vol. 37(3), pages 453-470, September.
  8. David E. M. Sappington & Joseph E. Stiglitz, 1987. "Privatization, Information and Incentives," NBER Working Papers 2196, National Bureau of Economic Research, Inc.
  9. Rafael La Porta & Florencio Lopez-de-Silane, 1997. "The Benefits of Privatization: Evidence from Mexico," NBER Working Papers 6215, National Bureau of Economic Research, Inc.
  10. Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 321-389, June.
  11. Lin, Justin Yifu & Li, Zhiyun, 2008. "Policy burden, privatization and soft budget constraint," Journal of Comparative Economics, Elsevier, vol. 36(1), pages 90-102, March.
  12. White, Mark D., 1996. "Mixed oligopoly, privatization and subsidization," Economics Letters, Elsevier, vol. 53(2), pages 189-195, November.
  13. repec:ebl:ecbull:v:8:y:2007:i:2:p:1-7 is not listed on IDEAS
  14. de Fraja, Giovanni & Delbono, Flavio, 1989. "Alternative Strategies of a Public Enterprise in Oligopoly," Oxford Economic Papers, Oxford University Press, vol. 41(2), pages 302-11, April.
  15. Kato, Kazuhiko & Tomaru, Yoshihiro, 2007. "Mixed oligopoly, privatization, subsidization, and the order of firms' moves: Several types of objectives," Economics Letters, Elsevier, vol. 96(2), pages 287-292, August.
  16. Gareth Myles & Hassan Khodavaisi & Nigar Hashimzade, 2007. "An irrelevance result with differentiated goods," Economics Bulletin, AccessEcon, vol. 8(2), pages 1-7.
  17. Sang-Ho Lee & Hae-Shin Hwang, 2003. "Partial Ownership For The Public Firm And Competition," The Japanese Economic Review, Japanese Economic Association, vol. 54(3), pages 324-335.
  18. Jefferson, Gary H. & Su, Jian, 2006. "Privatization and restructuring in China: Evidence from shareholding ownership, 1995-2001," Journal of Comparative Economics, Elsevier, vol. 34(1), pages 146-166, March.
  19. Clarke, George R. G. & Lixin Colin Xu, 2002. "Ownership, competition, and corruption : bribe takers versus bribe payers," Policy Research Working Paper Series 2783, The World Bank.
  20. Mujumdar, Sudesh & Pal, Debashis, 1998. "Effects of indirect taxation in a mixed oligopoly," Economics Letters, Elsevier, vol. 58(2), pages 199-204, February.
  21. Gouret, Fabian, 2007. "Privatization and output behavior during the transition: Methods matter!," Journal of Comparative Economics, Elsevier, vol. 35(1), pages 3-34, March.
  22. Laffont, Jean-Jacques & Tirole, Jean, 1986. "Using Cost Observation to Regulate Firms," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 614-41, June.
  23. Warzynski, Frederic, 2003. "Managerial change, competition, and privatization in Ukraine," Journal of Comparative Economics, Elsevier, vol. 31(2), pages 297-314, June.
  24. Vining, Aidan R & Boardman, Anthony E, 1992. " Ownership versus Competition: Efficiency in Public Enterprise," Public Choice, Springer, vol. 73(2), pages 205-39, March.
  25. Leonard Wang & Tai-Liang Chen, 2010. "Do cost efficiency gap and foreign competitors matter concerning optimal privatization policy at the free entry market?," Journal of Economics, Springer, vol. 100(1), pages 33-49, May.
  26. Bennett, John & Maw, James, 2003. "Privatization, partial state ownership, and competition," Journal of Comparative Economics, Elsevier, vol. 31(1), pages 58-74, March.
  27. Joanna Poyago-Theotoky, 2001. "Mixed oligopoly, subsidization and the order of firms' moves: an irrelevance result," Economics Bulletin, AccessEcon, vol. 12(3), pages 1-5.
  28. Bjorvatn, Kjetil & Soreide, Tina, 2005. "Corruption and privatization," European Journal of Political Economy, Elsevier, vol. 21(4), pages 903-914, December.
  29. Toshihiro Matsumura & Osamu Kanda, 2005. "Mixed Oligopoly at Free Entry Markets," Journal of Economics, Springer, vol. 84(1), pages 27-48, 02.
  30. Yoshihiro Tomaru & Masayuki Saito, 2010. "Mixed Duopoly, Privatization And Subsidization In An Endogenous Timing Framework," Manchester School, University of Manchester, vol. 78(1), pages 41-59, 01.
  31. John S. Heywood & Guangliang Ye, 2009. "Delegation in a mixed oligopoly: the case of multiple private firms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 30(2), pages 71-82.
  32. Megginson, William L & Nash, Robert C & van Randenborgh, Matthias, 1994. " The Financial and Operating Performance of Newly Privatized Firms: An International Empirical Analysis," Journal of Finance, American Finance Association, vol. 49(2), pages 403-52, June.
  33. Yoshihiro Tomaru, 2006. "Mixed Oligopoly, Partial Privatization and Subsidization," Economics Bulletin, AccessEcon, vol. 12(5), pages 1-6.
  34. A. Brandão & S. Castro, 2007. "State-owned enterprises as indirect instruments of entry regulation," Journal of Economics, Springer, vol. 92(3), pages 263-274, December.
  35. Fjell, Kenneth & Heywood, John S., 2004. "Mixed oligopoly, subsidization and the order of firm's moves: the relevance of privatization," Economics Letters, Elsevier, vol. 83(3), pages 411-416, June.
  36. Leonard F. S. Wang & Ya-Chin Wang & Lihong Zhao, 2009. "Privatization And Efficiency Gain In An International Mixed Oligopoly With Asymmetric Costs," The Japanese Economic Review, Japanese Economic Association, vol. 60(4), pages 539-559.
  37. John Vickers & George Yarrow, 1991. "Economic Perspectives on Privatization," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 111-132, Spring.
  38. Guofu Tan & Justin Yifu Lin, 1999. "Policy Burdens, Accountability, and the Soft Budget Constraint," American Economic Review, American Economic Association, vol. 89(2), pages 426-431, May.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:hit:hitjec:v:52:y:2011:i:1:p:55-68. 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: (Digital Resources Section, Hitotsubashi University Library)

The email address of this maintainer does not seem to be valid anymore. Please ask Digital Resources Section, Hitotsubashi University Library to update the entry or send us the correct address

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.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.