Bargaining externalities in a privatization programme

John Bennett () and James Maw

Economics of Transition and Institutional Change, 2019, vol. 27, issue 2, 447-455

Abstract: In privatization programmes, the state commonly keeps a minority ownership stake in firms. We provide an explanation based on the externality that privatization of one firm has on the profitability of others. If this externality is negative, as with oligopolistic firms, the government can gain a strategic advantage in bargaining over the sale of one firm if it keeps an ownership share in another. We consider both the simultaneous and the sequential sale of firms. The results apply to the period in which privatization takes place, and are consistent with the delayed sale of minority ownership often observed in practice.

Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1111/ecot.12206

Related works:
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:wly:ectrin:v:27:y:2019:i:2:p:447-455

Access Statistics for this article

More articles in Economics of Transition and Institutional Change from John Wiley & Sons
Bibliographic data for series maintained by Wiley Content Delivery ().