Article
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The Effect of Mixed Ownership on Competition
Version 1
: Received: 23 March 2024 / Approved: 29 March 2024 / Online: 29 March 2024 (11:45:06 CET)
How to cite: Colonescu, C.; Ghosh, S. The Effect of Mixed Ownership on Competition. Preprints 2024, 2024031851. https://doi.org/10.20944/preprints202403.1851.v1 Colonescu, C.; Ghosh, S. The Effect of Mixed Ownership on Competition. Preprints 2024, 2024031851. https://doi.org/10.20944/preprints202403.1851.v1
Abstract
Partially state-owned firms are common in both developed and developing countries and contribute around 10% of the world's GDP. This has led to a rich literature exploring various aspects of competition between such “mixed”-ownership firms. This paper contributes to the existing literature by studying the effects of mixed ownership on the intensity of competition in oligopoly markets. Our findings indicate that state ownership exerts an anti-competitive influence, with a higher state ownership share resulting in less aggressive behavior by firms in the product market. This result implies that industries with a higher proportion of state ownership yield lower total surplus. Further, when considering factors such as taxes, soft budget constraints, and weak property rights, the anti-competitive effects of state ownership are accentuated.
Keywords
competition; partial state ownership; mixed duopoly; privatization.
Subject
Business, Economics and Management, Economics
Copyright: This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
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