THE SCOPE FOR NON‐PROFIT OBJECTIVES IN A MIXED OLIGOPOLY UNDER INTERNATIONAL COMPETITION |
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| Authors: | Johan WILLNER Sonja GRÖNBLOM Annina KAINU Johan FLINK |
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| Affiliation: | 1. ?bo Akademi University, Finland;2. Statistics and Research ?land, ?land Islands |
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| Abstract: | We ask how the scope for non‐profit objectives in a state‐owned enterprise (SOE) in a mixed oligopoly changes because of competition from firms in another country. There is no change if costs and demand are given, unless the trade partner is a low‐cost country. However, the scope for non‐profit objectives is limited by the country's relative size if wages are market‐clearing and if workers and firms are stationary, because of reduced competitiveness caused by higher real wage rates. The total surplus is then not affected by the actions of the SOE. International trade does not otherwise reduce the scope for its non‐profit objectives if workers and firms are mobile, but productivity differences might require restrictions in order to avoid a complete relocation of the workforce in either country. |
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| Keywords: | Mixed oligopoly international trade non‐profit objectives L21 H44 F12 |
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