Privatization and Restructuring in Concentrated Markets

Arbeitspapier

This paper examines the restructuring of state assets in markets deregulated by privatizations and investment liberalizations. We show that the government has a stronger incentive to restructure than the buyer: A firm restructuring only takes into account how much its own profit will increase. The government internalizes that restructuring increases the sales price not only from the increase in the acquirer's profit, but also from a reduced profit for the non-acquirer, whose profits decrease due to its rival's restructuring. We also identify situations where a slow sale can significantly reduce the sales price because of strategic investment and product market effects.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Nota di Lavoro ; No. 107.2004

Classification and Topics

• Classification: Wirtschaft ; Auctions ; Comparison of Public and Private Enterprises and Nonprofit Institutions; Privatization; Contracting Out ; Socialist Enterprises and Their Transitions
• Subject: Privatization ; Asset ownership ; Restructuring ; Privatisierung ; Oligopol ; Unternehmenskonzentration

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Norback, Pehr-Johan ; Persson, Lars
• Event: Veröffentlichung
• (who): Fondazione Eni Enrico Mattei (FEEM)
• (where): Milano
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/117980
• Last update: 10.03.2025, 11:42 AM CET