Endogenous Asset Ownership Structures in Deregulated Markets

Pehr-Johan Norbäck and Lars Persson

No 604, Working Paper Series from Research Institute of Industrial Economics

Abstract: This paper determines the equilibrium ownership structure in an emerging market deregulated by privatization and investment liberalization. It is shown that bidding competition in the privatization stage is necessary but not sufficient for reaching an efficient equilibrium market structure. Competition in the ensuing entry stage is also necessary. Otherwise, one firm can induce another to take the role of the weak firm in the subsequent product market competition, by making concessions in the bidding in the privatization auction. It is also shown that Employment Guarantees may "help" the buyer of the privatized firm "abstain" from investing and by that creating a less competitive market structure.

Keywords: Privatization; Ownership; FDI; Auctions; Employment Guarantees (search for similar items in EconPapers)
JEL-codes: D44 F23 L10 L40 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2003-10-27
New Economics Papers: this item is included in nep-ifn
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Endogenous asset ownership structures in deregulated markets (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0604

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