Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/95192
Authors: 
Norbäck, Pehr-Johan
Persson, Lars
Year of Publication: 
2000
Series/Report no.: 
IUI Working Paper 532
Abstract: 
This paper determines the equilibrium market structure in an international oligopoly which is opened up by a privatization. Market power is shown to be an important determinant of the equilibrium market structure, when greenfield investment costs are high. When the greenfield investment costs are low, however, the risk of monopolization decreases. It is also shown that 'Investment Guarantees' can be counterproductive by helping the buyer of the state assets prevent other investors from entering greenfield by credible over-investment. We also find that the negative effects on domestic firms by National Treatments clauses are partly paid for by the foreign investor in the bidding competition over the state assets.
Subjects: 
Privatization
FDI
Acquisitions
National Treatment
Investment Guarantees
JEL: 
F23
L13
L33
Document Type: 
Working Paper

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