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Relocation and public ownership of firms

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  • Brcena-Ruiz, Juan Carlos
  • Garzn, Mara Begoa

Abstract

This paper studies how the structure of markets in advanced countries is affected by the relocation of domestic firms to countries where wage costs are lower. We consider that private firms compete in the product market with firms partly owned by the government (semipublic firms). Assuming a mixed duopoly, we obtain the counterintuitive result that, for a certain range of values of the parameters of the model, in equilibrium, only the semipublic firm relocates. Moreover, if only one firm changes its location, social welfare is greater if it is the semipublic firm that relocates. J. Japanese Int. Economies 23 (1) (2009) 71-85.

Suggested Citation

  • Brcena-Ruiz, Juan Carlos & Garzn, Mara Begoa, 2009. "Relocation and public ownership of firms," Journal of the Japanese and International Economies, Elsevier, vol. 23(1), pages 71-85, March.
    • Handle: RePEc:eee:jjieco:v:23:y:2009:i:1:p:71-85
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    Cited by:

    1. Fanti, Luciano & Buccella, Domenico, 2015. "Bargaining agenda in public and private monopoly," MPRA Paper 64184, University Library of Munich, Germany.
    2. Choi, Kangsik, 2012. "Indirect Taxation and Privatization in a Model of Government's Preference," MPRA Paper 42968, University Library of Munich, Germany.
    3. Joaquín Andaluz, 2011. "Validity of the “Principle of Maximum Product Differentiation” in a unionized mixed-duopoly," Journal of Economics, Springer, vol. 102(2), pages 123-136, March.
    4. Choi, Kangsik, 2009. "Government's Preference and Timing of Endogenous Wage Setting: Perspectives on Privatization and Mixed Duopoly," MPRA Paper 17221, University Library of Munich, Germany.
    5. Haruna Shoji & Goel Rajeev K., 2016. "International Tariffs in a Mixed Oligopoly with Research Spillovers," Peace Economics, Peace Science, and Public Policy, De Gruyter, vol. 22(3), pages 277-293, August.
    6. Choi, Kangsik, 2010. "The Timing of Endogenous Wage Setting under Bertrand Competition in a Unionized Mixed Duopoly," MPRA Paper 20205, University Library of Munich, Germany.
    7. Choi, Kangsik, 2013. "Unionized Mixed Oligopoly and Privatization with Excess Burden of Taxation," MPRA Paper 51156, University Library of Munich, Germany.
    8. Bárcena Ruiz, Juan Carlos & Garzón San Felipe, María Begoña, 2011. "Relocation and Investment in R&D by Firms," IKERLANAK 2011-52, Universidad del País Vasco - Departamento de Fundamentos del Análisis Económico I.
    9. Choi, Kangsik, 2010. "Strategic Budget Constraints of Public Firm under Bertrand Competition of Unionized Mixed Duopoly," MPRA Paper 19969, University Library of Munich, Germany.

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