Vertically-Related Markets, Foreign Competition, and Optimal Privatization Policy

What role should public firms play in the upstream market?

“…They found the marginal production cost of input is closely related to the optimal degree of privatization. Chang and Ryu (2015) also show that the upstream public firm's market share is critical to the optimal privatization policy in vertically related markets. Unlike the studies above that paid attention to upstream public firms, Wu et al (2016) turn to study the social welfare of a vertically related downstream privatization, while Liu et al (2019) investigate the role of the retailers and welfare implications of upstream‐firm privatization.…”

Profit‐enhancing entries in mixed oligopolies

“…Future research should examine these factors. 25 For the discussion on the nationality of private firms, see Corneo and Jeanne (1994), Fjell and Pal (1996), Pal and White (1998), B arcena-Ruiz and Garzón (2005a,2005b, and Chang and Ryu (2015). For the discussion on the nationality of public firms, see Lin and Matsumura (2012) and Sato and Matsumura (2019).…”

The relationship between privatization and corporate taxation policies

“…The assumption that the investors in privatized firms are domestic is standard in the literature (Cato and Matsumura, 2012;Chang, 2005Chang, , 2007Chang and Ryu, 2015;Lee et al, 2018;Wu et al, 2016, Xu et al, 2016, 2017, and may be realistic. On the other hand, foreign investors may also hold stakes in private.…”

“…Matsumura and Okamura (2015) find that the optimal degree of privatization may increase when the market competition among private firms loosens. Chang and Ryu (2015) investigate vertically related markets in which an upstream public firm competes with a foreign private rival and show that full nationalization can be optimal, while full privatization cannot be, in contrast to Matsumura (1998). 3 Han and Ogawa (2012) show that an increase in the effectiveness of demand-boosting activities reduces the optimal degree of privatization.…”