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Mixed oligopoly with state holding corporations and consumer-friendly firm

Quan Dong and Leonard F.S. Wang

International Review of Economics & Finance, 2019, vol. 62, issue C, 121-130

Abstract: We consider a mixed oligopoly where a managerial private firm competes with a state holding corporation with differentiated products. The private firm produces only one product and the state holding corporation may have two plants producing both goods. We show that the magnitude of consumer friendliness depends on the organization structure and the degree of privatization of the state corporations, and the degree of substitution between products. The magnitude generally decreases (increases) with the privatization (the degree of substitution between products). Moreover, the magnitude is greater when the state corporation is multi-plant than when it is unit-plant if the degree of privatization is high enough. This result suggests detailed information about firms is required if a government intends to encourage private firm be more consumer-friendly in a mixed market where state corporations are important.

Keywords: CSR; Privatization; State holding corporation; Multiproduct firm (search for similar items in EconPapers)
JEL-codes: D21 L13 L14 L22 L33 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1016/j.iref.2019.03.001

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