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Firm Ownership, Product Differentiation And Welfare

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  • YUANZHU LU
  • SOUGATA PODDAR

Abstract

The purpose of this paper is to study the impact of firm ownership in a differentiated industry. We find there is no effect on product differentiation and welfare due to ownership ratio change between private and state so long as the private (state) ownership in a partially state‐owned firm remains at least half (less than half). However, when the private (state) ownership in the partially state‐owned firm falls below half (rises more than half), the degree of product differentiation increases (decreases) whereas welfare decreases (increases) in the share of private (state) ownership; and thus the extent of private or state ownership matters.

Suggested Citation

  • Yuanzhu Lu & Sougata Poddar, 2007. "Firm Ownership, Product Differentiation And Welfare," Manchester School, University of Manchester, vol. 75(2), pages 210-217, March.
    • Handle: RePEc:bla:manchs:v:75:y:2007:i:2:p:210-217
    DOI: 10.1111/j.1467-9957.2007.01011.x
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