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Privatization and entries of foreign enterprises in a differentiated industry
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Journal Article
Privatization and entries of foreign enterprises in a differentiated industry
2009
Overview
We investigate whether or not privatization is beneficial from the viewpoint of social welfare in a monopolistic competition model. We discuss the relationship between the welfare effects of privatization and the degree of foreign direct investment in the private sector, which is an important problem in developing countries and in transition economies such as China and Central and Eastern European countries. We find that, in the long run, privatization of a public firm is more likely to improve welfare when the country depends on foreign capital in the private sector, whereas the opposite tendency exists in the short run.
Publisher
Vienna : Springer Vienna,Springer-Verlag,Springer Vienna,Springer Nature B.V
