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

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Abstract

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 inanother country. There is no change if costs and demand are given, unlessthe trade partner is a low-cost country. However, the scope for non-profitobjectives is limited by the country's relative size if wages are market-clearing and if workers and firms are stationary, because of reducedcompetitiveness caused by higher real wage rates. The total surplus is thennot affected by the actions of the SOE. International trade does nototherwise reduce the scope for its non-profit objectives if workers andfirms are mobile, but productivity differences might require restrictions inorder to avoid a complete relocation of the workforce in either country. 

Original languageUndefined/Unknown
Pages (from-to)415–436
JournalAnnals of Public and Cooperative Economics
Volume89
Issue number2
Publication statusPublished - 2018
MoE publication typeA1 Journal article-refereed

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