Sato, Susumu and Matsumura, Toshihiro (2017): Dynamic privatization policy.
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Abstract
This study formulates a two-period model in which the government privatizes a state-owned public firm over multiple periods. We introduce the shadow cost of public funding (i.e., the excess burden of taxation). The government is concerned about both the total surplus and the revenue obtained from the privatization of the public firm. We find that the government may or may not increase the degree of privatization over time depending on the competitiveness of the product market and nationality of private competitors. The government increases the degree of privatization over time if the product market is competitive and the foreign ownership share in private firms is low. Although it adjusts its privatization policy over time, this harms welfare. In addition, this distortion in the ex-post incentive leads to too low a degree of privatization in the first period.
Item Type: | MPRA Paper |
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Original Title: | Dynamic privatization policy |
English Title: | Dynamic privatization policy |
Language: | English |
Keywords: | timing of privatization, commitment, state-owned public enterprise; foreign competition |
Subjects: | H - Public Economics > H4 - Publicly Provided Goods > H42 - Publicly Provided Private Goods L - Industrial Organization > L3 - Nonprofit Organizations and Public Enterprise > L33 - Comparison of Public and Private Enterprises and Nonprofit Institutions ; Privatization ; Contracting Out |
Item ID: | 79849 |
Depositing User: | Susumu Sato |
Date Deposited: | 25 Jun 2017 07:59 |
Last Modified: | 27 Sep 2019 17:05 |
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URI: | https://mpra.ub.uni-muenchen.de/id/eprint/79849 |