State-owned enterprises as indirect instruments of entry regulation

• Type: Article in International Scientific Journal
• Date: 2007

Authors

brandao, a (Author) FEP; castro, s (Author) FEP

Journal

Title: Journal of Economics/ Zeitschrift fur Nationalokonomie

Vol. 92 No. 3

Pages: 263-274

ISSN: 0931-8658

Publisher: Springer Nature

Indexing

ISI Web of Knowledge - 28 Citations

Scopus - 26 Citations

Other information

Authenticus ID: P-004-61W

DOI: 10.1007/s00712-007-0286-y

Abstract (EN): In the context of mixed markets, Matsumura and Kanda (J Econ 84(1): 27-48, 2005) show that social welfare in free entry equilibrium is maximized when there exists a public firm in the market. En passant, these authors state that this outcome is connected to the entry-deterring influence of a public firm. In this way, they counter-act the excess entry problem of Mankiw and Whinston (Rand J Econ 17(1): 48-58, 1986). We explain this result arguing that the state-owned firm can be an indirect instrument to regulate entry. In fact, under free entry equilibrium welfare may be greater with the presence of a public firm than with a social planner.

Language: English

Type (Professor's evaluation): Scientific

No. of pages: 12