Abstract
We consider strategic trade and privatization policies in international bilateral mixed markets where a domestic state-owned enterprise competes with both domestic and foreign private enterprises in each country. We examine the strategic interaction of two countries’ optimal choices of privatization and trade policies with different combinations of production subsidy and import tariff, and find some interesting policy implications. First, a higher social welfare can be achieved with the appropriate degree of privatization when both governments adopt a production subsidy only. Second, FTA can work as a coordination device to solve the prisoner’s dilemma problem. Third, the maximum-revenue privatization, combined with zero subsidy and higher tariff, is higher than optimum-welfare privatization. Finally, the international bilateral equilibrium needs less degree of privatization and lower subsidy rate, even though it is jointly suboptimal from the viewpoint of global welfare.
Keywords: Strategic privatization, International bilateral mixed market, Industrial policy, Optimal tariff.
Related Books
Capitalist Realism in Africa: Realities and Myths in Advertising
Digital Currency: An International Legal and Regulatory Compliance Guide
Intellectual Property Basic Manual for Researchers in Universities
.jpg)
Internet Economics: Models, Mechanisms and Management
Learning Why and How: A Reader in Managing Nonprofit and Voluntary Organizations
Markets, Business and Sustainability
Organizational Management: Case Studies for Graduate Students
People, Preferences & Prices: Sequencing the Economic Genome of the Consumer Mind
Redefining University Leadership for the 21st Century
Research on Corporate Environmental Responsibility in China