Taxation on a mixed oligopoly in the presence of foreign ownership

Chia Chi Wang, Jiunn Rong Chiou

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

Abstract

This paper analyzes the optimal taxation policy in a mixed duopoly when the private firm is jointly owned by domestic and foreign investors. The optimal policy is tax if the foreign shareholding is high enough; otherwise, it should be subsidy. Besides, to obtain a higher welfare, the taxation policy is superior to the privatization policy only when the private firm is mainly domestically owned. However, when full foreign shareholding of the private firm is allowed, the taxation and privatization can obtain the same level of social welfare regardless of the public firm’s marginal cost.

Original languageEnglish
Pages (from-to)342-355
Number of pages14
JournalAsia-Pacific Journal of Accounting and Economics
Volume23
Issue number3
DOIs
StatePublished - 2 Jul 2016

Keywords

  • foreign shareholding
  • mixed oligopoly
  • privatization
  • Taxation

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