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An analysis of policy harmonization on privatization and trade liberalization

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  • Wang, Chia-Chi
  • Chiou, Jiunn-Rong

Abstract

This paper investigates optimal privatization and trade policies in an international mixed oligopoly model. When both policies are available, the optimal policy combination is partial privatization and a positive tariff. Moreover, if one of the two policies is not available, the optimal trade liberalization and optimal privatization would be equivalent in welfare as long as the demand is linear. Implementing privatization and/or trade policies obtains the win–win situation for two countries. Besides, the effect of full privatization on welfare is ambiguous and depends crucially on the difference between firms' marginal cost. Lastly, by adopting a low degree of privatization block trade may increase domestic welfare.

Suggested Citation

  • Wang, Chia-Chi & Chiou, Jiunn-Rong, 2015. "An analysis of policy harmonization on privatization and trade liberalization," International Review of Economics & Finance, Elsevier, vol. 38(C), pages 279-290.
    • Handle: RePEc:eee:reveco:v:38:y:2015:i:c:p:279-290
    DOI: 10.1016/j.iref.2015.03.002
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    Cited by:

    1. Hamid Beladi & Avik Chakrabarti & Sugata Marjit, 2016. "Competitive General Equilibrium with Finite Change and Theory of Policy Making," Economics and Politics, Wiley Blackwell, vol. 28(1), pages 1-7, March.
    2. Xiaochun Li & Tiantian Jia, 2022. "Partial privatization, producer services, and unemployment in developing countries," Review of Development Economics, Wiley Blackwell, vol. 26(1), pages 423-441, February.
    3. Chao, Chi-Chur & Nabin, Munirul & Nguyen, Xuan & Sgro, Pasquale M., 2016. "Wage inequality and welfare in developing countries: Privatization and reforms in the short and long run," International Review of Economics & Finance, Elsevier, vol. 42(C), pages 474-483.
    4. Xu, Lili & Lee, Sang-Ho & Wang, Leonard, 2017. "Strategic Trade and Privatization Policies in Bilateral Mixed Markets," MPRA Paper 80340, University Library of Munich, Germany.

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    More about this item

    Keywords

    Privatization; Tariff; Trade liberalization;
    All these keywords.

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises

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