Do Partial Cross Ownership and Budget Constraints Matter for Privatization Policy?

We show that in the presence of cross-ownership associated with an improvement of production inefficiency of the public firm, the optimal privatization policy is full privatization whether budget constraints are imposed on the public firm. For reaching a higher level of social welfare, the government does not need to impose budget constraints on the public firm when the fixed cost is low. Copyright Springer Science+Business Media New York 2014

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Year of publication:	2014
Authors:	Wang, Leonard ; Hsu, Chu ; Lee, Jen
Published in:	Journal of Industry, Competition and Trade. - Springer. - Vol. 14.2014, 4, p. 519-529
Publisher:	Springer
Subject:	Privatization \| Cross ownership \| Budget constraint \| Social welfare

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011155036