Effect of privatization on firm competitiveness a game theory model with application in the automotive industry
International Journal of Organization Theory & Behavior
ISSN: 1093-4537
Article publication date: 1 March 2007
Abstract
This paper develops and proposes a game theory model that illustrates the effect of privatization on firm competitiveness using cases from the automotive industry. We first provide the mathematical derivation of the model for a competitive industry then address the special case of a duopoly. We chose the automotive industry as it is a relevant illustration of global competitive pressures pushing firms to develop strategic alliances or consolidate. The model shows that privatization has (1) a positive effect on firm performance given that managerial incentives are well defined, and (2) facilitates the firmʼs entry into strategic alliances. We then turn to discuss Renaultʼs empirically observed success factors in the European - and gradually global - markets over the last three decades despite the economic cycles.
Citation
Chalhoub, M.S. (2007), "Effect of privatization on firm competitiveness a game theory model with application in the automotive industry", International Journal of Organization Theory & Behavior, Vol. 10 No. 4, pp. 431-468. https://doi.org/10.1108/IJOTB-10-04-2007-B001
Publisher
:Emerald Publishing Limited
Copyright © 2007 by PrAcademics Press