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To favor more or less? Corporate lobbying over preferential treatment to state-owned enterprises

Dapeng Cai () and Jie Li ()
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Jie Li: Jinan University

Journal of Regulatory Economics, 2019, vol. 55, issue 3, No 5, 334-357

Abstract: Abstract In OECD and many other countries, state-owned public enterprises normally receive various forms of exclusive preferential treatment that directly affect the profits of all firms, motivating firms to lobby politicians. Using the common agency approach, we show that when state ownership of public enterprises is sufficiently low, i.e., the privatization process is sufficiently advanced, corporate lobbying boosts preferential treatment, causing public enterprises to “advance” as the playing field is tilted in their favor. Conversely, when state ownership is high, corporate lobbying can reduce preferential treatment, causing public enterprises to “retreat” as the playing field levels.

Keywords: Corporate lobbying; Preferential treatment; Public enterprises; Common agency game; Privatization (search for similar items in EconPapers)
JEL-codes: L32 P20 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s11149-019-09388-7

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