The scope for non-profit objectives in a mixed oligopoly under international competition

A1 Journal article (refereed)

Internal Authors/Editors

Publication Details

List of Authors: Johan Willner, Sonja Grönblom, Annina Kainu, Johan Flink
Publisher: CIRIEC
Publication year: 2018
Journal: Annals of Public and Cooperative Economics
Volume number: 89
Issue number: 2
Start page: 415
End page: 436
eISSN: 1467-8292


We ask how the scope for non-profit objectives in a state-owned enterprise
(SOE) in a mixed oligopoly changes because of competition from firms in
another country. There is no change if costs and demand are given, unless
the trade partner is a low-cost country. However, the scope for non-profit
objectives is limited by the country's relative size if wages are market-
clearing and if workers and firms are stationary, because of reduced
competitiveness caused by higher real wage rates. The total surplus is then
not affected by the actions of the SOE. International trade does not
otherwise reduce the scope for its non-profit objectives if workers and
firms are mobile, but productivity differences might require restrictions in
order to avoid a complete relocation of the workforce in either country.

Last updated on 2020-11-07 at 05:06