International mixed triopoly, privatization and subsidization

This paper examines privatization in an international mixed triopoly model with a state-owned firm, a domestic firm and a foreign private firm to reassess the welfare effect of production subsidies. The main result of the paper is that if optimal domestic subsidies are used before and after privatization, then privatization improves domestic social welfare. The paper finds that this result is quite different from that of the existing domestic mixed oligopoly model