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Privatization, Efficiency, and Social Responsibility in a Mixed Duopoly

In: Selected Aspects of Non-Profit Organisations

Author

Listed:
  • Yuxiang Zou
  • Tai-Liang Chen

Abstract

It is believed that the privatization of state-owned enterprise allows efficiency improvement of the firm and then provides the impetus for indirect entry regulation of private entrants. When privatization occurs, three major interacting effects determine the optimal privatization level in a mixed market: welfare-reducing effect, output substitution effect, and efficiency-enhancing effect. Given these effects, the study examines in depth that, under certain condition, partial privatization in a mixed duopoly is a win-win-win policy for the social welfare, state-owned, and private firms. It implies that the partially privatized firm concerns not only firm's profitability but social responsibility. The efficiency-enhancing effect, if weak, will impel the state-owned firm to release more stock shares at the optimum and then bring about a welfare-improving, profit-increasing situation. The study further demonstrates the effects of the magnitude of the efficiency-enhancing effect on the level of social welfare and firms' profits.

Suggested Citation

  • Yuxiang Zou & Tai-Liang Chen, 2020. "Privatization, Efficiency, and Social Responsibility in a Mixed Duopoly," Chapters, in: Tatjana Horvat (ed.), Selected Aspects of Non-Profit Organisations, IntechOpen.
    • Handle: RePEc:ito:pchaps:195903
    DOI: 10.5772/intechopen.85979
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    More about this item

    Keywords

    mixed duopoly; privatization; efficiency; profitability; welfare;
    All these keywords.

    JEL classification:

    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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