Foreign competition and optimal privatization with excess burden of taxation

Jen-Yao Lee () and Leonard F. S. Wang ()
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Jen-Yao Lee: National Kaohsiung University of Applied Science
Leonard F. S. Wang: Zhongnan University of Economics and Law

Journal of Economics, 2018, vol. 125, issue 2, No 5, 189-204

Abstract: Abstract We examine in a mixed oligopoly setting how foreign competition and the excess burden of taxation will affect privatization policy in the presence of strategic tax/subsidy policies. We show that in the presence of excess burden of taxation with foreign competitors, output subsidy coupled with import tariff and partial privatization is adopted to improve the social welfare. However, if the excess burden of taxation is relatively large, the government may switch to use production tax coupled with tariff policy and partial privatization to improve the social welfare.

Keywords: Cournot competition; Excess burden of taxation; Output subsidy; Import tariff (search for similar items in EconPapers)
JEL-codes: F13 H21 L13 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:kap:jeczfn:v:125:y:2018:i:2:d:10.1007_s00712-017-0592-y

DOI: 10.1007/s00712-017-0592-y

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