Work

Privatization Policy in an International Oligopoly

Year: 2005

Type: article

Abstract: This paper studies privatization policy in an international oligopoly. The argument that equal treatment of foreign investors will be detrimental to domestic welfare by shifting profits from domestic to foreign firms is shown to be less relevant in privatization auctions than for greenfield FDI. This is because such profit shifts are paid for in part by foreign firms in the bidding competition for the privatized firm in the auction. It is also shown that small local equity requirements are likely to be beneficial, but large ones are counterproductive, preventing welfare‐enhancing foreign acquisitions.

Source: Economica

DOI: 10.1111/j.1468-0335.2005.00436.x

Authors: Pehr‐Johan Norbäck, Lars Persson

Institutions: Research Institute of Industrial Economics, Centre for Economic Policy Research

Language: English

Topic: International Business and FDI

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: green

Funder: European University Institute