TITLE:
Privatization and Employment in Post-Communist Countries
AUTHORS:
Chang Liu, Yasunori Ishii
KEYWORDS:
Privatization Policy, State Firms’ Labor Inputs, Post-Communist Countries, International Duopoly, Third-Country Trade Model
JOURNAL NAME:
Theoretical Economics Letters,
Vol.4 No.7,
August
8,
2014
ABSTRACT: In this study, by establishing
a third-country trade model of an international duopoly where two state firms
from different post-communist countries compete against each other, we analyze the
effects of a change in the degree of privatization on firms’ labor inputs and
on the optimal privatization policy in post-communist countries. We show that a
rise in the degree of privatization in a country raises labor input, output and
exports of that country’s firm, while reducing those of the rival firm. Furthermore,
we find that either full or partial privatization of state firms could be optimal
in post-communist countries.