Suchergebnisse

AbstractThis paper examines how cross‐border ownership and restrictions affect commercial policies optimally chosen by the government of an importing country. Focusing on import competition in an oligopoly market served by two local producers and a foreign firm, we study and compare two partial ownership arrangements without corporate control: unilateral ownership by the foreign firm over a local producer and bilateral ownership between the two entities. The main findings are as follows: (i) When foreign ownership is unilateral, the optimal trade and industrial policies are an import tariff and a production subsidy, respectively. (ii) When foreign ownership is bilateral, the trade policy can be an import subsidy, and the industrial policy is a production subsidy. These results differ from the benchmark equilibrium without ownership, under which the optimal policy mix consists of an import tariff and a production subsidy. (iii) Unilateral foreign ownership always reduces domestic welfare. However, bilateral foreign ownership can increase domestic welfare when local producers' cost disadvantages are substantially high. (iv) Considering the usual lump‐sum transfer for a balanced budget, bilateral ownership entails a lower public burden than two other scenarios for the government to finance its strategic use of trade and industrial policies.

Although many papers consider the effect of switching costs on entry when the incumbent firm is privately‐owned, the effect when the incumbent firm is publicly‐owned has not been analyzed. We seek to fill that gap here and show that, unlike the case of a private incumbent where entry may decrease welfare, with a public incumbent entry always raises welfare. We also study whether the government privatizes the public incumbent firm and whether it deters entry. We find that switching costs reduce the range of values of the parameters for which privatization is chosen. Moreover, the government may prefer a private monopoly to a public monopoly or even a mixed duopoly. Finally, there is more privatization and less entry if the government decides on both privatization and entry than if it decides only on privatization.

This paper analyzes the interaction between two political economy decisions by a government: whether to privatize a public firm and what environmental policy to choose (an environmental tax or an emission standard). We find that when market competition is weak the government does not privatize the public firm and sets an environmental tax. When it is intermediate the public firm is not privatized and the government sets an environmental standard. Finally, when market competition is strong the government privatizes the public firm and is indifferent between a tax and a standard. ; Este artículo analiza la interacción entre dos decisiones de economía política que tiene que tomar un gobierno: si privatizar una empresa pública y qué política ambiental elegir (un impuesto medioambiental o un estándar de emisiones). Encontramos que cuando la competencia de las empresas en el mercado es débil, el gobierno no privatiza la empresa pública y establece un impuesto medioambiental. Cuando es intermedia, la empresa pública no se privatiza y el gobierno establece un estándar medioambiental. Finalmente, cuando la competencia en el mercado es fuerte, el gobierno privatiza la empresa pública y está indiferente entre un impuesto y un estándar.

We consider a state holding corporation with two plants that may produce complementary or substitute goods and that competes with one or two private firms. We find that the government partially privatizes the two plants of the state holding corporation and is indifferent between selling them partially to a single investor and to different investors. However, in the former case the government retains a greater (smaller) stake in the state corporation if goods are substitutes (complements).