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FIRM OWNERSHIP, PRODUCT DIFFERENTIATION AND WELFARE *
Author(s) -
LU YUANZHU,
PODDAR SOUGATA
Publication year - 2007
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/j.1467-9957.2007.01011.x
Subject(s) - state ownership , product differentiation , product (mathematics) , welfare , state (computer science) , economics , market economy , welfare state , product market , business , labour economics , monetary economics , emerging markets , finance , incentive , geometry , mathematics , algorithm , politics , computer science , political science , law
The purpose of this paper is to study the impact of firm ownership in a differentiated industry. We find there is no effect on product differentiation and welfare due to ownership ratio change between private and state so long as the private (state) ownership in a partially state‐owned firm remains at least half (less than half). However, when the private (state) ownership in the partially state‐owned firm falls below half (rises more than half), the degree of product differentiation increases (decreases) whereas welfare decreases (increases) in the share of private (state) ownership; and thus the extent of private or state ownership matters.