Cost‐reduction innovation under mixed economy

This paper analyzes the innovation strategies of mixed duopoly with a (semi‐) public firm and a private firm, and the welfare effects of public ownership are captured. The findings indicate that the private firm is more active in research and development activities than the (semi‐) public firm. Mean...

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Bibliographic Details
Published inManagerial and decision economics Vol. 41; no. 7; pp. 1195 - 1201
Main Authors Nie, Pu‐yan, Yang, Yong‐cong
Format Journal Article
LanguageEnglish
Published Chichester Wiley Periodicals Inc 01.10.2020
Subjects
Cost reduction
Duopoly
Innovations
Nationalization
Production increases
Profits
Public ownership
R&D
Research & development
Social welfare
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Summary:This paper analyzes the innovation strategies of mixed duopoly with a (semi‐) public firm and a private firm, and the welfare effects of public ownership are captured. The findings indicate that the private firm is more active in research and development activities than the (semi‐) public firm. Meanwhile, the total production increases with the degree of public ownership, and both firms have to suffer losses in profits. From the viewpoint of social welfare, partial nationalization is the optimal strategy. The policy implication of the findings highlights that partial nationalization should be encouraged under mixed economy.
ISSN:0143-6570
1099-1468
DOI:10.1002/mde.3165