PRIVATIZATION POLICY UNDER FOREIGN COMPETITION AND UNEMPLOYMENT IN CHINA
This paper investigates the role of foreign competition and regional unemployment in influencing privatization policy for domestic firms. With a general model specifying the existence of foreign competition and regional unemployment, we find a negative relationship between presence of foreign competition and state ownership of the domestic firm within the same sector. We also find a positive relationship between unemployment rate in a region and state ownership of the domestic firm in the same region. Econometric analysis for China supports the theoretical findings.
Foreign competition, Mixed Oligopoly, Privatization, Unemployment
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