 Foreign ownership, privatization and subsidization with shadow cost of public fundsDing Chen, Leonard F.S. Wang and Jen-yao Lee The North American Journal of Economics and Finance, 2019, vol. 50, issue C Abstract: We examine how the shadow cost of public funds will affect the privatization policy in the presence of strategic tax/subsidy policies in a mixed oligopoly model with foreign ownership. We show that (1) When the dual policies are employed, the privatization policy is partial privatization and the production tax may be used if the shadow of the public fund is relatively large; (2) When the privatization policy is employed, the degree of privatization is decreasing in the shadow cost of public funds if the share of foreign investors in the private firms is relative small; however, when the dual policies are employed, the degree of privatization is increasing in the shadow cost of public funds. Additionally, we show that the influence of foreign ownership on the privatization and subsidization policies are dependent upon the cost structures, ownership types, distribution of firms, and policy pairs. Keywords: Foreign ownership; Privatization; The shadow of the public fund; Production subsidy; Social welfare (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:50:y:2019:i:c:s1062940818303280 DOI: 10.1016/j.najef.2018.10.017 Access Statistics for this article The North American Journal of Economics and Finance is currently edited by Hamid Beladi More articles in The North American Journal of Economics and Finance from Elsevier |
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