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Domestic Policies as Strategic Measures in Multinational Markets

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  • Ali Dadpay

Abstract

This paper studies the role of privatization and subsidization policies as trade strategies in a single multinational market where private and public firms of different nationalities interact. The paper finds that when a country subsidizes its industry the rival country would have the incentive to retaliate by adopting a subsidization regime to prevent a free riders¡¯ situation from happening when said country moves to liberalize the market. However, this step does not eliminate the free rider problem governmentsare face in a market when they privatize their public firms unilaterally.

Suggested Citation

  • Ali Dadpay, 2017. "Domestic Policies as Strategic Measures in Multinational Markets," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 9(1), pages 1-9, January.
    • Handle: RePEc:ibn:ijefaa:v:9:y:2017:i:1:p:1-9
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    References listed on IDEAS

    as
    1. Nilssen, Tore & Sorgard, Lars, 2002. "A public firm challenged by entry: duplication or diversity?," Regional Science and Urban Economics, Elsevier, vol. 32(2), pages 259-274, March.
    2. White, Mark D., 1996. "Mixed oligopoly, privatization and subsidization," Economics Letters, Elsevier, vol. 53(2), pages 189-195, November.
    3. John S. Heywood & Guangliang Ye, 2009. "Privatisation And Timing In A Mixed Oligopoly With Both Foreign And Domestic Firms," Australian Economic Papers, Wiley Blackwell, vol. 48(4), pages 320-332, December.
    4. Ali Dadpay & John S. Heywood, 2006. "Mixed Oligopoly In A Single International Market," Australian Economic Papers, Wiley Blackwell, vol. 45(4), pages 269-280, December.
    5. 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.
    6. 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.
    7. Kenneth Fjell & John S. Heywood, 2002. "Public Stackelberg Leadership in a Mixed Oligopoly with Foreign Firms," Australian Economic Papers, Wiley Blackwell, vol. 41(3), pages 267-281, September.
    8. Kenneth Fjell & Debashis Pal, 1996. "A Mixed Oligopoly in the Presence of Foreign Private Firms," Canadian Journal of Economics, Canadian Economics Association, vol. 29(3), pages 737-743, August.
    9. Ali Dadpay, 2010. "Governments and Producers in Multinational Markets: A Mixed Oligopoly Analysis," Applied Economics Quarterly (formerly: Konjunkturpolitik), Duncker & Humblot, Berlin, vol. 56(3), pages 211-230.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Oligopoly; Cournot model; quantity competition; public enterprises and market performance;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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