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When Do State-Owned Firms Crowd Out Private Investment?

  • Buehler, Stefan

    ()

  • Wey, Simon

    ()

This note examines the conditions under which a state-owned firm with a political agenda crowds out investment by a private firm. We show that crowding out occurs if the private firm regards investments as strategic substitutes and private investment is undesirable from the state-owned firm's perspective.

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File URL: http://www1.vwa.unisg.ch/RePEc/usg/econwp/EWP-1209.pdf
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Paper provided by University of St. Gallen, School of Economics and Political Science in its series Economics Working Paper Series with number 1209.

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Length: 13 pages
Date of creation: Mar 2012
Date of revision:
Handle: RePEc:usg:econwp:2012:09
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  26. Delbono, Flavio & Denicolo, Vincenzo, 1993. "Regulating innovative activity : The role of a public firm," International Journal of Industrial Organization, Elsevier, vol. 11(1), pages 35-48, March.
  27. Boardman, Anthony E & Vining, Aidan R, 1989. "Ownership and Performance in Competitive Environments: A Comparison of the Performance of Private, Mixed, and State-Owned Enterprises," Journal of Law and Economics, University of Chicago Press, vol. 32(1), pages 1-33, April.
  28. Boycko, Maxim & Shleifer, Andrei & Vishny, Robert W, 1996. "A Theory of Privatisation," Economic Journal, Royal Economic Society, vol. 106(435), pages 309-19, March.
  29. Ishibashi, Ikuo & Matsumura, Toshihiro, 2006. "R&D competition between public and private sectors," European Economic Review, Elsevier, vol. 50(6), pages 1347-1366, August.
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