Corporate social responsibility and privatization policy in a mixed oligopoly

Seung-Leul Kim, Sang-Ho Lee () and Toshihiro Matsumura

MPRA Paper from University Library of Munich, Germany

Abstract: This article formulates a mixed oligopoly in which a public firm competes with two private firms that may adopt corporate social responsibility (CSR). We investigate the optimal privatization policy and find that, depending on the magnitude of CSR, the optimality of either nationalization or full privatization can hold. In particular, we show that the optimal degree of privatization is decreasing in the magnitude of CSR and thus nationalization can be optimal if they have homogeneous objectives. Under significant heterogeneity of the objectives among firms, however, the optimal degree of privatization is non-monotone with the magnitude of CSR, but full privatization can be optimal. This result suggests that the optimal privatization policy depends on both the magnitude of CSR and the heterogeneity of the objectives among private firms.

Keywords: Corporate social responsibility; partial privatization; mixed oligopoly (search for similar items in EconPapers)
JEL-codes: D43 L13 L22 L32 (search for similar items in EconPapers)
Date: 2017-06-12
New Economics Papers: this item is included in nep-bec and nep-com
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Corporate social responsibility and privatization policy in a mixed oligopoly (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:79780

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