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Partial privatization, foreign competition, and optimum tariff

Version 2 2024-06-13, 10:41
Version 1 2017-07-26, 12:15
journal contribution
posted on 2024-06-13, 10:41 authored by CC Chao, ESH Yu
Using a simple international mixed oligopoly model with one public and one or more foreign firms, this paper examines the effect of partial privatization or foreign competition on optimum tariffs and finds that foreign competition lowers the optimal tariff rate but partial privatization raises it. This result implies that trade liberalization is welfare improving if a country opens up its economy by allowing foreign competition. However, the liberalization policy is not desirable when the country only partially or completely privatizes its publicly-owned enterprises.

History

Journal

Review of international economics

Volume

14

Pagination

87-92

Location

Chichester, Eng.

ISSN

0965-7576

eISSN

1467-9396

Language

eng

Publication classification

C1.1 Refereed article in a scholarly journal

Copyright notice

2006, The Authors

Issue

1

Publisher

Wiley