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International cross-ownership of firms and strategic privatization policy

Dapeng Cai () and Yukio Karasawa-Ohtashiro ()

Journal of Economics, 2015, vol. 116, issue 1, 39-62

Abstract: We consider how the international cross-ownership of firms affects the privatization of a public firm competing with foreign firms. We show that when firms compete á la Cournot in a third market under a linear demand function, the domestic ownership of foreign firms can impede privatization, whereas the foreign ownership of the domestic firm can promote privatization. Moreover, the domestic ownership of foreign firms can render neither complete privatization nor complete nationalization optimal under moderate conditions. Conversely, when firms compete á la Bertrand, we demonstrate that it is always optimal to pursue complete nationalization. Copyright Springer-Verlag Wien 2015

Keywords: Cross-ownership; Privatization; Mixed enterprises; State ownership; F12; F13; H44; L13 (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:116:y:2015:i:1:p:39-62

DOI: 10.1007/s00712-014-0429-x

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