search query: @author De Fraja, G. / total: 6
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| Author: | De Fraja, G. |
| Title: | Efficiency and privatisation in imperfectly competitive industries. |
| Journal: | Journal of Industrial Economics
1991 : MAR, VOL. 39:3, p. 311-321 |
| Index terms: | PRIVATIZATION COMPETITION OLIGOPOLY INDUSTRIAL ECONOMICS |
| Language: | eng |
| Abstract: | If a public firm is managed less efficiently than private producers facing similar conditions, the privatization will increase the overall efficiency of industry and benefit society. This apparent innocuous conclusion is challenged. As long as the private firms' efficiency improves as a result of competition, then it will also be higher when they are subjected to "unfair" competition from a public oligopolist with no budget constraint. It is shown that it may happen that the loss in efficiency due to the relatively inefficient public firm is more than compensated by gains in the efficiency of the private firms. This does not imply that the public managers should be encouraged to run their firms inefficiently. |
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