Optimal Privatisation and Trade Policies with Endogenous Market Structure

Abstract

This study investigates the short‐run and long‐run relationships of trade and privatisation policies. In both the short run and the long run, the optimal degree of privatisation is increasing in the import tariff rate. The optimal tariff rate is strictly positive in the short run but can be non‐positive in the long run. Thus, the long‐run analysis yields contrasting implications on trade policy in mixed oligopolies.