STRATEGIC PRIVATIZATION AND TRADE POLICIES IN AN INTERNATIONAL MIXED OLIGOPOLY

Authors

  • LIHUA HAN

    1. School of Political Science and Public Administration, Shandong University
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    • The author thanks Hikaru Ogawa (Nagoya University) and the anonymous referee for their helpful comments and suggestions.


  • Manuscript received 19.8.09; final version received 9.8.10.

Abstract

In this paper we examine the optimal privatization and trade policies in a mixed oligopoly in which a domestic semipublic firm competes against domestic and foreign private firms in a home market. Specifically, we consider two strategic trade instruments: a domestic production subsidy and an import tariff, with partial privatization. The result shows that the privatization strategy is affected strongly by trade instruments. Moreover, the choice of trade instruments lies upon the relative number of domestic and foreign private firms.

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