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Optimal degree of privatization and the environmental problem

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  • Kazuhiko Kato

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Abstract

We determine the optimal degree of privatization in a mixed duopoly when the environmental problem exists. With regard to the ownership of the private firms, we analyze two cases: (h) the private firm is owned by domestic private investors and (f) it is owned by foreign private investors. A comparison of the two cases presents the following results. Partial privatization is always desirable in (h), and the optimal degree of privatization is independent of the degree of environmental damage. However, in (f), whether partial privatization is desirable or not depends on the degree of environmental damage: there are cases where full privatization or full nationalization is optimal. Copyright Springer-Verlag Wien 2013

Suggested Citation

  • Kazuhiko Kato, 2013. "Optimal degree of privatization and the environmental problem," Journal of Economics, Springer, vol. 110(2), pages 165-180, October.
  • Handle: RePEc:kap:jeczfn:v:110:y:2013:i:2:p:165-180
    DOI: 10.1007/s00712-012-0316-2
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Toshihiro Matsumura & Makoto Okamura, 2015. "Competition and privatization policies revisited: the payoff interdependence approach," Journal of Economics, Springer, vol. 116(2), pages 137-150, October.
    2. Xu, Lili & Cho, Sumi & Lee, Sang-Ho, 2016. "Emission tax and optimal privatization in Cournot–Bertrand comparison," Economic Modelling, Elsevier, vol. 55(C), pages 73-82.
    3. Xu, Lili & Lee, Sang-Ho, 2015. "Strategic Privatization With Tariffs And Environmental Taxes In An International Mixed Duopoly," Hitotsubashi Journal of Economics, Hitotsubashi University, vol. 56(1), pages 135-154, June.
    4. Tsai, Tsung-Hsiu & Wang, Chia-Chi & Chiou, Jiunn-Rong, 2016. "Can privatization be a catalyst for environmental R&D and result in a cleaner environment?," Resource and Energy Economics, Elsevier, vol. 43(C), pages 1-13.
    5. Jiancai Pi & Li Yang & Yu Zhou, 2013. "Privatization and environmental pollution in a mixed duopoly," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics, vol. 31(2), pages 163-192.
    6. repec:hit:hitjcm:v:56:y:2015:i:1:p:135-154 is not listed on IDEAS
    7. Corrado Benassi & Alessandra Chirco & Marcella Scrimitore, 2014. "Optimal manipulation rules in a mixed oligopoly," Journal of Economics, Springer, vol. 112(1), pages 61-84, May.
    8. Lee, Sang-Ho & Nakamura, Tamotsu & Park, Chul-Hi, 2017. "Optimal Privatization Policy in a Mixed Eco-Industry in the Presence of Commitments on Abatement Technologies," MPRA Paper 80902, University Library of Munich, Germany.

    More about this item

    Keywords

    Environment; Mixed duopoly; Partial privatization; L13; L33; Q50;

    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
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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