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Strategic privatization in a mixed duopoly with a socially responsible firm

Kadohognon Ouattara

Economics Bulletin, 2017, vol. 37, issue 3, 2067-2075

Abstract: This paper examines the impact of Corporate Social Responsibility (CSR) on privatization in a mixed duopoly consisting of one public firm and one Socially Responsible firm (SR firm). Two types of ownership of the SR firm are considered: (D) the SR firm is owned by domestic private investors and (F) it is owned by foreign private investors. Our model suggests that when considering the extent of privatization, the policy makers should account for two influences: the level of CSR and the nationality of the SR firm. Our results show that government should decrease the degree of privatization if the level of CSR increases. Furthermore, if the level of CSR is high enough, the optimal degree of privatization in an international mixed duopoly is higher than that obtained in a domestic mixed duopoly. This is in contrast to the standard mixed duopoly without CSR activities.

Keywords: Corporate social responsibility; Partial privatization, Cournot competition; Social welfare (search for similar items in EconPapers)
JEL-codes: L1 L3 (search for similar items in EconPapers)
Date: 2017-09-04
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Citations: View citations in EconPapers (16)

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