This note examines the conditions under which a state-owned firm with a political agenda crowds out investment by a private firm. We show that crowding out occurs if the private firm regards investments as strategic substitutes and private investment is undesirable from the state-owned firm's...

This paper examines demand-enhancing investment and pricing in mixed duopoly. We analyze a model with differentiated products and reduced-form demand, making no assumptions on the relative efficiency of the public firm. First, we derive sufficient conditions for public investment to crowd out...