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| Author: | Norbäck, P-J. Persson, L. |
| Title: | Privatization and foreign competition |
| Journal: | Journal of International Economics
2004 : MAR, VOL. 62:2, p. 409-416 |
| Index terms: | Foreign investment Liberalization Mergers Privatization Tariffs |
| Language: | eng |
| Abstract: | The equilibrium market structure is determined in an international oligopoly, where a state enterprise is sold at an auction. It is suggested that high greenfield costs and high trade costs do not necessarily induce foreign acquisitions in privatizations, despite the fact that foreign companies would gain considerably from acquiring in such situations. The reason is that domestic companies can then prevent foreign companies from becoming strong local competitors and thus, their willingness to pay for the state assets is high. |
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