Privatization Policy in an International Oligopoly

Pehr-Johan Norbäck and Lars Persson

No 608, Working Paper Series from Research Institute of Industrial Economics

Abstract: This paper studies privatization policy in an international oligopoly. The argument that equal treatment of foreign investors will be detrimental to domestic welfare by shifting profits from domestic to foreign firms is shown to be less relevant in privatization auctions than in greenfield FDI models, since these profit shifts are partly paid for by the foreign firms in the bidding competition. Effects of local equity requirements, trade and investment policies are also studied. It is, for instance, shown that small local equity requirements are likely to be beneficial but large ones are counterproductive, by preventing welfare-enhancing foreign acquisitions.

Keywords: Privatization; Acquisitions; National Treatment; Investment Policy; Trade Policy (search for similar items in EconPapers)
JEL-codes: F23 L13 L33 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2003-11-25
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 (4)

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Related works:
Journal Article: Privatization Policy in an International Oligopoly (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0608

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