Domestic Policies as Strategic Measures in Multinational Markets

Ali Dadpay

International Journal of Economics and Finance, 2017, vol. 9, issue 1, 1-9

Abstract: This paper studies the role of privatization and subsidization policies as trade strategies in a single multinational market where private and public firms of different nationalities interact. The paper finds that when a country subsidizes its industry the rival country would have the incentive to retaliate by adopting a subsidization regime to prevent a free riders¡¯ situation from happening when said country moves to liberalize the market. However, this step does not eliminate the free rider problem governmentsare face in a market when they privatize their public firms unilaterally.

Keywords: Oligopoly; Cournot model; quantity competition; public enterprises and market performance (search for similar items in EconPapers)
Date: 2017
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Persistent link: https://EconPapers.repec.org/RePEc:ibn:ijefaa:v:9:y:2017:i:1:p:1-9

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