The Interdependence between Ownership Status and Market Structure
The Case of Privatization
Bibliographic Data
| ID | 9727663 |
|---|---|
| Authors | Chaim Fershtman (corresponding author) |
| Year | 1990 |
| Volume | 57 |
| Issue | 227 |
| Pages | 319 |
| Publication date | 1990-08-01 |
| Peer Reviewed | Yes |
| Open Access | No |
| Type | ARTICLE |
| Venue | Economica (JOURNAL) |
| Journal identifiers | ISSN: 0013-0427 • E-ISSN: 1468-0335 |
| Publisher | JSTOR (PUBLISHER) |
| DOI | 10.2307/2554937 |
| OpenAlex | W1989679567 |
| Language | EN |
| Citations received | 6 |
| References cited | 4 |
One of the common justifications for privatization policy is the assertion that private firms are more efficient and thus potentially more profitable. The analysis of privatization policy, however, cannot be complete without specific attention to the market structure in which the firm operates and in particular to the interdependence between the ownership status and market structure. I examine a dupolistic market and demonstrate that a partly nationalized firm might realize higher profits than its private, profit-maximizing, competitor. The degree of nationalization also affects the interaction between an incumbent firm and a potential entrant. Using A. K. Dixit's framework, I consider the implications of privatization on the attractiveness of entry, the possibility of deterring entry, and the incumbent position as a natural monopoly. It is shown that it is possible that a firm is not a natural monopoly while being private but that alteration of its ownership status can transform it to a natural monopoly. Such an analysis establishes my main claim that ownership status may affect the market structure in which firms operate
Assertion · Attractiveness · Business · Economics · Industrial organization · Market economy · Market structure · Microeconomics · Monopoly · Natural monopoly · Position (finance) · Profit (economics) · Corporate Finance and Governance · Finance · Global trade and economics · Merger and Competition Analysis
A Mixed Duopoly with a Lifetime Employment Contract as a Strategic Commitment
Institutions and firms’ technological changes and productivity growth
Public utility ownership and in-kind trade policy in vertically related markets
Comparative statics for aggregative games the strong concavity case
Public–Private Mixed Delivery and Information Effects
Endogenous Cost Differentials between Public and Private Enterprises
| Unique citing works | 6 |
|---|---|
| Citations per year | 0,19 |
| Citation span | 1994 - 2023 (30) |
| Citation velocity | historical |
| Highly cited | No |
| Citation types | Neutral: 5 |