Mixed Ownership, Unemployment, and Welfare for a Developing Economy

Abstract

This paper considers the employment and welfare effects of mixed ownership via partial privatization of state-owned enterprises for a developing economy. An increase in the private ownership lowers the production and, hence, worsens urban unemployment in the short run. However, in the long run, capital moves to the rural region, alleviating the problem of urban unemployment. The employment effect can have a positive contribution to social welfare in the long run. Copyright � 2006 The Authors; Journal compilation � 2006 Blackwell Publishing Ltd.

The incidence of environmental regulation in a developing economy with sector-specific unemployment: a note

“…In many developing economies, state-owned enterprises often play an important role. Beladi and Chao (2006a) and Chao et al (2006) investigated the effects of partial privatization in a developing economy. This extension will be an effort to reflect the characteristics of a developing economy more accurately.…”

“…In a pioneering literature, Harris and Todaro (1970) depicted a two-sector model involving urban unemployment, which has received considerable attention in economic research. It is evidenced by the applications of this model to imported technologies by Batra and Lahiri (1987), to the incidence of pollution control by Wang (1990), and to the partial privatization by Beladi and Chao (2006a).…”

Managerial delegation and partial privatization in general equilibrium with sector-specific unemployment

“…where e ¼ Xp 00 =p 0 measures the curvature of the demand function, e ¼ Àp=Xp 0 is the price elasticity of demand for good X, and b = m/p is ratio of unit cost to the price in sector X, as defined in Beladi and Chao (2006). Using (15) and (16), the effects of managerial delegation on the output level of good X and the capital rental can be solved as follows:…”

“…Matsumura (1998) presents the objective function of a partially privatized firm in mixed duopoly. Beladi and Chao (2006) extend Matsumura's (1998) partial privatization model to a general-equilibrium framework and examine the employment and welfare effects of partial privatization in a developing economy. In the real world, the transfer of shareholdings in the market is being viewed as the privatization method, while managerial delegation that occurs within the organization is focused on the transfer of management rights.…”

Endogenous timing in a mixed oligopoly with semipublic firms

“…Bárcena-Ruiz and Garzón (2003) analyze the merger between a publicly-owned firm and a private firm to set up a new firm with mixed private and public ownership. Finally, Beladi and Chao (2006) analyze how the employment level is affected by the partial privatization of a publicly-owned firm while Tomaru (2006) focuses on its impact on tax and subsidy policies.…”