Privatization of a Renewable Resource Sector in the presence of a Foreign Enterprise

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Abstract

We analyze the optimal level of privatization of a state-owned enterprise (SOE) in a renewable resource sector. We construct a model where a SOE and a foreign private enterprise compete in quantity in a market of a renewable resource good. In the short-run, a government should privatize the SOE when the foreign private enterprise is present, while it should keep the SOE when the foreign firm is absent. In the long-run, a government should privatize its SOE regardless of the presence or the absence of the foreign private competitor.<br>JEL Classification:F23, H10, Q2

Journal

  • The International Economy

    The International Economy 18(0), 21-30, 2015

    The Japan Society of International Economics

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