Foreign-owned firms and partial privatization of state holding corporations

We consider a state holding corporation with two plants producing heterogeneous goods. In the partially foreign-owned private sector, firms may be organized as uniplant or multiplant. We find that the stake that the government retains in the state corporation depends on whether goods are substitutes or complements, whether private firms are uniplant or multiplant and the percentage of foreign ownership in private firms. The main result is that when foreign ownership is high, there is more privatization with uniplant (multiplant) private firms if goods are substitute (complements). However, when foreign ownership is low, the opposite result is obtained.