Privatization and Foreign Competition

Arbeitspapier

This paper determines the equilibrium market structure in a mixed international oligopoly, where the state assets are sold at an auction. The model suggests that low greenfield costs and low trade costs induce foreign acquisitions. The intuition is that domestic firms can then not prevent foreign firms from becoming strong competitors and thus, their willingness to pay for the state assets is low. We also find that profit shifting from domestic to foreign firms generated by National Treatments clauses is partly paid for by the foreign investor in the bidding competition over the state assets.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IUI Working Paper ; No. 545

Classification and Topics

• Classification: Wirtschaft ; Multinational Firms; International Business ; Oligopoly and Other Imperfect Markets ; Comparison of Public and Private Enterprises and Nonprofit Institutions; Privatization; Contracting Out
• Subject: Privatization ; Failing firms ; FDI ; Acquisitions ; National treatment ; Privatisierung ; Übernahme ; Auslandsinvestition ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Persson, Lars ; Norbäck, Pehr-Johan
• Event: Veröffentlichung
• (who): The Research Institute of Industrial Economics (IUI)
• (where): Stockholm
• (when): 2001

Further information

• Handle: http://hdl.handle.net/10419/94757
• Last update: 10.03.2025, 11:41 AM CET