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Better governance matters optimal privatization policy

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  • Leonard Wang
  • Tien-Der Han

Abstract

The quality of corporate governance is influential to operating efficiency of a public firm and thereby affects the government’s privatization policies. Within a mixed duopoly market, this paper considers corporatization and related corporate governance improving in economic sense to show that the effects of public firm’s governance enhancement can be extracted out from the effects of privatization. More importantly, the optimal privatization policy should be a flexible instrument hinging on the extent of governance improvement. Scenarios with a less efficient or an equally efficient public firm are considered and the result holds in both scenarios. Hence policy implications apply. Copyright Eurasia Business and Economics Society 2015

Suggested Citation

  • Leonard Wang & Tien-Der Han, 2015. "Better governance matters optimal privatization policy," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 5(2), pages 189-206, December.
    • Handle: RePEc:spr:eurase:v:5:y:2015:i:2:p:189-206
    DOI: 10.1007/s40822-015-0025-6
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    Cited by:

    1. Qidi Zhang & Leonard F.S. Wang & Yapo Yang, 2020. "Indirect taxation with shadow cost of public funds in mixed oligopoly," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(3), pages 415-425, April.
    2. Mehmet Huseyin Bilgin & Giray Gozgor & Chi Keung Marco Lau, 2017. "Institutions and gravity model: the role of political economy and corporate governance," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 7(3), pages 421-436, December.

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    More about this item

    Keywords

    Mixed duopoly; Corporate governance; Corporatization; Privatization policy; 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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