Do Partial Cross Ownership and Budget Constraints Matter for Privatization Policy?

Leonard Wang (), Chu Hsu () and Jen Lee ()

Journal of Industry, Competition and Trade, 2014, vol. 14, issue 4, 519-529

Abstract: We show that in the presence of cross-ownership associated with an improvement of production inefficiency of the public firm, the optimal privatization policy is full privatization whether budget constraints are imposed on the public firm. For reaching a higher level of social welfare, the government does not need to impose budget constraints on the public firm when the fixed cost is low. Copyright Springer Science+Business Media New York 2014

Keywords: Privatization; Cross ownership; Budget constraint; Social welfare (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (2)

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DOI: 10.1007/s10842-013-0174-9

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