Privatization and Restructuring in Concentrated Markets

Lars Persson and Norbäck, Pehr-Johan
Authors registered in the RePEc Author Service: Pehr-Johan Norbäck

No 4871, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: This Paper examines the restructuring of state assets in markets deregulated by privatizations and investment liberalizations. We show that a net revenue maximizing government has a stronger incentive to restructure than a profit maximizing acquiring firm: A restructuring firm only takes into account how much its own profit will increase. The government internalizes that restructuring increases the sales price not only due to the increase in the acquirer's profit, but also due to 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.

Keywords: Privatization; Asset ownership; Restructuring; Oligopoly (search for similar items in EconPapers)
JEL-codes: D44 L13 L33 L40 P31 (search for similar items in EconPapers)
Date: 2005-01
New Economics Papers: this item is included in nep-com
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP4871 (application/pdf)

Related works:
Working Paper: Privatization and Restructuring in Concentrated Markets (2004)
Working Paper: Privatization and Restructuring in Concentrated Markets (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:4871

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP4871

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().