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Foreign Retailer Entry, Mixed Competition and the Large-Retailer Cultivation Policy:Macro Retailing Policy Analysis Based on Mixed Oligopoly Model |
SHI Ming ming |
Renmin University of China |
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Abstract The cultivation of large state-owned retailers is viewed as a positive government policy in current China’s transitional period. This paper constructs a mixed oligopolistic retailer competition model. The equilibrium analysis shows that with the mixed ownership retailers mutual competition, total domestic social surplus is not always positively correlated with the foreign firm’s technology and management level. While the state owned retailers (SOR) maximize the social surplus as their target, their entrance can improve the social objects achievement even if their efficiency is lower than the foreign counterparty or the price is lower than the marginal cost. To some extent, the large state owned retailer can determine the retail market scale and maintain the market stability. This conclusion means that given the clear expectation of SOR’ s state-contingent objective function, the retailing market’s supply security and governance can be improved through the specific mixed organizatio
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Received: 13 September 2011
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Corresponding Authors:
SHI Ming ming
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