Article

Privatization And Efficiency: Differentiating Ownership Effects from Political, Organizational, and Dynamic Effects

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Abstract

This paper argues that the private-public ownership factor should be differentiated from other factors that also influence the effect of privatization on efficiency. This is empirically confirmed in a longitudinal study of 24 Spanish firms, for which several political and organizational factors are found to influence the estimated effects of privatization on efficiency. The analysis of the timing of the effects reveals a strong significance for post-privatization years 5--6 (negative), and 7--8 (positive). This suggests that the negative effect of these factors is transitional, being eventually offset by the positive effects of the change to private ownership.

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... Such inefficiencies are mainly due to limited competition in the markets where these organizations operate, as well as to political influence [82]. Academic literature has analyzed PPPs mainly within the frameworks provided by the agency theory, the theory of property rights and the theory of public choice [83]. ...
... Finally, the theory of public choices has its central tenet in the assumption that politicians pursue the maximization of their utility rather than of the public interest [83]. As a result, they set goals for PPPs that are more compatible with electoral consensus than with efficiency [90]. ...
... Villalonga [83] carried out research examining 153 studies on the subject. She found that 104 of them showed better performance in private companies compared to ones operated by public bodies, 14 studies reached an opposite conclusion while 35 of them were substantially neutral. ...
Article
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Institutionalized Public Private Partnerships (PPPs) are a widely debated phenomenon, addressed by both scientific literature and policymakers. The most important contribution of this work is to describe the various theories used for understanding the performance expectations of PPPs, as the focus on performance is still poor despite the growing interest in participant companies (mixed-owned companies), especially at the local level. While analyzing the evaluation of the performance of these entities, a wide stream of literature has focused on profitability and efficiency, showing a substantial difference in terms of the performance of such companies compared to private capital ones. All this leads us to consider the Public Value theory as the best framework in literature to address the many dimensions of performance and business strategy in PPPs while pursuing sustainable development. The interest in this area has increased lately, mainly due to the growing complexity within this dynamic context. Therefore, it seems meaningful to carry out a systematic review of the relevant published literature in this field. This study contributes to the literature on sustainable development in Public Private Partnerships (PPPs) that are seen as a form of mixed-owned companies, trying to address their multilayered performance expectations within the public value perspective and to understand how the role of performance measurement is influencing business strategies and the attitude towards sustainable environment. This will prove useful to scholars, policymakers and practitioners alike.
... Aussi, la théorie des organisations met en évidence les caractéristiques avantageuses pour la firme privée entre autres en termes d"incitations et de mécanismes de contrôle (Villalonga, 2000), mais aussi en termes : de définition des objectifs (qui ne sont pas corrompus par des desseins politiques dans la sphère privée), de structure organisationnelle (qui est souple et réactive dans le privé), de la communication ou la force de travail que l"on peut réaménager à souhait dans les firmes privées. ...
... -les tests historiques, c"est-à-dire la comparaison de la performance d"avant et d"après privatisation (Alexandre et Charreaux, 2004 ;Villalonga, 2000). ...
... De façon globale, les études ne se prononcent pas sur l"impact positif ou non de la privatisation sur la performance en général ou sur la productivité en particulier (Alexandre et Charreaux, 2004 ;Villalonga, 2000 ;Megginson et al., 1994). ...
... The literature on the efficiency of privatizations is abundant (see Megginson andNetter, 2001 andVillalonga, 2000, and sources cited therein). However, the existing studies are not specifically devoted to French privatizations. ...
... According to the authors, the ''age'' of the company influences the effects of privatization. More recently, Villalonga (2000) has applied a similar method to a measure based on EBIT. ...
... The studies that propose an explanatory model of the performance are relatively rare. The two principal ones are those of D' Souza et al. (2000) and of Villalonga (2000). To capture the efficiency of French privatizations, we use these studies as a starting point. ...
... A principal-agent problem, however, may negatively affect a signaling advantage or a public seller's choice of tendering procedure, for instance, the public seller may not be selling at a profit-maximizing price and may accept a lower price because of time limitations or unwillingness to invest in search (cf. Villalonga 2000). ...
... professional sellers' lower information deficiencies. For public sellers, objectives other than profit maximization may result in lower reservation prices and lack of incentives to invest in searches may explain higher information deficiencies compared to professionals (Villalonga 2000). ...
Article
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This article investigates the role played by information, search, and bargaining cost in agricultural land markets to explain price dispersion. Based on a hedonic model under incomplete information, we build a two‐tier stochastic frontier. By linking costs of being information deficient to agent characteristics such as degree of professionalism, we identify relative price effects of buyer and seller types related to information deficiency. We compile a comprehensive data set of more than 10,000 transactions in Saxony‐Anhalt, Germany, between 2014 and 2017. We find institutional sellers to achieve the lowest losses resulting from information deficiency and sell with mark‐ups, whereas other sellers incur losses. This seller group could benefit from investments in professionalism and roughly halve their cost of being information deficient. Tenant buyers can benefit from informational advantages resulting in markdowns with lowest effects in the harvest season. We conclude that Germany's policy makers can do more to support market transparency.
... La misma idea de una mayor flexibilidad la defiende la teoría organizacional, debido a que las entidades privadas presentan mayores mecanismos de control y motivación (Earle, 2006). Por otro lado, la teoría de la agencia defiende la privatización, ya que permite que los intereses de los gestores sean comunes a los de la empresa, por lo que se minimiza el hecho de que se busque más el interés propio que el de la organización en su conjunto (Villalonga, 2000). ...
... As a result of privatization and denationalization of the state property, the share of organizations and enterprises with private ownership engaged in all types of economic activity has increased. Villalonga lists over 150 papers that compare the performance of public and private enterprises and evaluation of the results of privatization in different countries based on different examples (Villalonga, 2000). Among them, about ⅔ contain the conclusion that private enterprises are more efficient, and ⅓ argues that there is no basis for such a conclusion, and the authors of more than a dozen works have to give their preference to the state ownership. ...
... This assumption can be justified based on several empirical studies, such asMegginson and Netter (2001),Mizutani and Uranishi (2003),Jiang et al. (2013), andMatsumura and Shimizu (2010). In addition,Villalonga (2000) investigates what causes the difference of production efficiency between private and public firms. From the viewpoint of the economic theory,Matsumura and Matsushima (2004) show that the equilibrium production cost of the public firm becomes higher than that of the private firm.9 ...
Article
Under the assumption that a public firm provides goods or services to two markets and that a private firm provides goods or services to one market only, this study examines whether public firms should be privatized. It also investigates how the production quantity of a private firm changes when its degree of privatization increases. We find that when the market share of a duopoly market is large (small), partial privatization (nationalization) is socially preferable. We also find that the quantity produced by the private firm does not always increase along with the degree of privatization.
... (Hardin 1968). These policies have carved out the institutional landscape of natural resource management in the Western world for the last half-century (Villalonga 2000;Carothers and Chambers 2012). However, the rationale for using a privatized approach to governance is now manifesting into new, often hybridized and difficult to recognize approaches. ...
Article
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Privatization is, since Hardin, often promoted as a solution to many natural resource management challenges, particularly in common-pool resource systems. However, novel forms of privatization are being implemented in unexamined ways. In this article we explore how privatization affects natural resource management from the perspective of multi-dimensional social-ecological systems. We critique the notion that privatization is desirable due to its pure efficiency , and argue that efficiency must be relative to achieving other normative societal goals, in particular, sustainability. While sustainability outcomes often cannot be fully actualized, the processes through which privatization attempts to achieve them are more tangible criteria. First, we draw on (1) distributional and (2) procedural justice as normative societal goals to assess effectiveness of different forms of privatization. Second, we analyze the broader implications of privatization for social-ecological system functioning considering (3) path dependency and (4) spillover effects. We apply these four concepts to examine three different cases of privatization: eco-certification in fisheries, seed patents in agriculture and property rights in rangelands. We argue that the evaluative criteria for the success of privatization are often oversimplified, and highlight how privatization can influence social-ecological systems and the achievement of normative goals in largely unexamined ways.
... Vergés expresses it as follows, when referring to the comparison of privatised public companies, between before and after privatisation, "from the set of studies available the general conclusion that emerges is that no significant differences of efficiency are observed … between the after and the before for the privatised companies" [Vergés, (2013), p.36]. "Also, ratify these conclusions in Spain, the work of Gamir (1999) and internationally (Kemal, 1996;Halliday and Carruthers, 1996;Villalonga, 2000;Gertler and Kuan, 2002;Cullinane et al., 2005;Sacristan, 2006;Okten and Peren Arin, 2006;Cavaliere and Scabrosetti, 2008)" [Rivera Vicencio, (2017), pp.94-171]. This is how the capitalist economy "neither costs nor social returns enter into the cost-price calculations of private enterprise, unless it is forced by laws and the systematic application of social security principles, as in the case workers' compensation laws" [Kapp, (2006), p.47]. ...
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Historically, the government of large corporations (corporate governance) were transforming society as a whole into a government over all others, inducing the development of a series of government apparatuses and knowledge. Having as a central axis the economy, which materialises in neoliberalism, this new governmentality begins its period of consolidation after the abandonment of the gold standard in 1971. In these almost 50 years, it has developed by the hand of corporate governance, the greatest economic inequality, a huge precariousness of the working class and the strong increase in the social costs of capitalism. This paper describes the process of concentration of wealth and its effects on society. During this period, there is also a displacement of the central axis of capitalism and its system of appropriation, as it was the system of capitalist production, by appropriation through the financial-monetary system (indirect appropriation), together with the transfer of state planning to private companies. Finally, this paper describes the weaknesses of the current system of capitalist appropriation and the end of the Anglo-American financial empire.
... However, contracting governments are often motivated not just by perceived transactions costs, but by technical efficiency and productivity gains. Legislation encouraging profitseeking organizations to enter government service sectors is enacted for the primary purpose of improving the productivity of public resources (Sharkansky, 1980;Villalonga, 2000;Warner & Hefetz, 2008). Governments then, seeking the productivity gains associated with privatization, often allow rent collection by proprietary organizations while trying to manage the accompanying probity hazard (Bovaird, 2004;Cabral, et al., 2013;Laffont & Tirole, 1991). ...
Preprint
The past few decades have been characterized by a growing body of profit-seeking public service areas with the understanding that profit-seeking organizations will deliver public services more efficiently than government can. These sectors include, but are not limited to, health care, corrections and education. Governments have created quasi markets to attract private providers of services in these sectors, with varying results. Organizational economics has provided the primary explanation for quasi markets, but questions about the sought-for efficiencies actually realized through these markets persist. We integrate resource dependence theory and organizational economics to provide a more comprehensive explanation of the persistence of quasi markets.
... Various studies' results, independent of the study type, done before 2000 showed cost savings between 15% and 30% (Borcherding, Pommerehne, & Schneider, 1982;Domberger & Jensen, 1997;Savas, 1987;Thompson & Elling, 2000;Villalonga, 2000). These findings corresponded with policy maker expectations. ...
Thesis
In light of the debate on the consequences of competitive contracting out of traditionally public services, this research compares two mechanisms used to allocate funds in development cooperation—direct awarding and competitive contracting out—aiming to identify their potential advantages and disadvantages. The agency theory is applied within the framework of rational-choice institutionalism to study the institutional arrangements that surround two different money allocation mechanisms, identify the incentives they create for the behavior of individual actors in the field, and examine how these then transfer into measurable differences in managerial quality of development aid projects. In this work, project management quality is seen as an important determinant of the overall project success. For data-gathering purposes, the German development agency, the Gesellschaft für Internationale Zusammenarbeit (GIZ), is used due to its unique way of work. Whereas the majority of projects receive funds via direct-award mechanism, there is a commercial department, GIZ International Services (GIZ IS) that has to compete for project funds. The data concerning project management practices on the GIZ and GIZ IS projects was gathered via a web-based, self-administered survey of project team leaders. Principal component analysis was applied to reduce the dimensionality of the independent variable to total of five components of project management. Furthermore, multiple regression analysis identified the differences between the separate components on these two project types. Enriched by qualitative data gathered via interviews, this thesis offers insights into everyday managerial practices in development cooperation and identifies the advantages and disadvantages of the two allocation mechanisms. The thesis first reiterates the responsibility of donors and implementers for overall aid effectiveness. It shows that the mechanism of competitive contracting out leads to better oversight and control of implementers, fosters deeper cooperation between the implementers and beneficiaries, and has a potential to strengthen ownership of recipient countries. On the other hand, it shows that the evaluation quality does not tremendously benefit from the competitive allocation mechanism and that the quality of the component knowledge management and learning is better when direct-award mechanisms are used. This raises questions about the lacking possibilities of actors in the field to learn about past mistakes and incorporate the finings into the future interventions, which is one of the fundamental issues of aid effectiveness. Finally, the findings show immense deficiencies in regard to oversight and control of individual projects in German development cooperation.
... As seen above, there is not a lucid theoretical framework to guide empirical work on privatization and growth, and current models do not completely specify the variables that should be apprehended constant while guiding statistical inference on this relationship. This has produced a diverse empirical literature, in which few studies control for the variables considered by others 3 . ...
... We also consider the views of neoclassical economists who argue that private ownership incentivizes business to innovate and contain costs compared to public ownership (Porta et al. 1998). This view is embedded in the property rights perspective in economics (Martin and Parker 1997;Villalonga 2000) and the residual claimant theory (Rowthorn and Chang 2005). The private sector have more clearly defined property rights rather than the public sector, and thus, incentives for seeking profits by private owners which then leads to more effective management performance monitoring (Alchian 1965;McCormick and Meiners 1988). ...
Article
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This study analyzes corporate ownership as a corporate governance mechanism and its role in creating firm value. Previous research shows that there is no convergence on the firm-value corporate ownership relationship. Most research in this area takes a cross national approach ignoring the uniqueness of each institutional setting particularly those of emerging nations. Using a unique firm level dataset, we investigate how corporate control nature and ownership concentration affect the value of Chinese listed firms. First, non-state owned control is associated with a higher Tobin’s Q while a negative premium is found for state owned. Using the hybrid and the correlated random effects model we confirm a U-shaped non-linear relationship between ownership concentration and Tobin’s Q, implying that firm value first decreases and then increases as block holders own more shares. Further investigation reveals that the negative effect of ownership concentration is weaker when a firm equity nature is non-state owned enterprises (non-SOEs) compared to state-owned enterprises (SOEs). While ownership concentration appears to be an efficient mechanism for corporate governance its effect is weaker for SOEs compared to non-SOEs. The results support privatization of SOEs, sound reforms such as the split share structure reform as crucial for the development of China’s stock market.
... On the one hand, studies that take the microeconomic perspective generally refer to efficiency as profitability or productivity, analysing samples of companies that have been privatized in specific sectors and specific regions (e.g. Megginson et al. 1994;Villalonga 2000;Cabeza-García and Gómez-Ansón 2007;D'Souza et al. 2005;Cullinane et al. 2005;Tiemann and Schreyögg 2012;Estache et al. 2002). On the other hand, those who take a macroeconomic perspective discuss efficiency in terms of economic growth or development, and financial and budgetary situation, such as reduction of deficits and debt (e.g. ...
Article
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This study analyses the link between privatisation reforms and income inequality on a sample of 25 European countries between 2003 and 2013. Previous literature has related privatisations with the level of poverty, welfare, and well-being of population, but findings regarding income inequality are scarce, especially in the European context. The empirical results of this study suggest a positive link between both topics, for different indicators of privatisation and inequality. Concretely, findings suggest that income inequality is higher in countries that have resorted to privatisation reforms to a greater extent. Then, social consequences should be considered when evaluating regulatory reform, such as privatisation.
... Patients were there because they Journal of Management Research ISSN 1941-899X 2020 www.macrothink.org/jmr 75 had made a financial choice for the more positive medical service provision in private hospitals (Villalonga, 2000). ...
Article
This is a research paper that is focused on the evaluation of senior nursing leadership perceptions and its impacts on Emergency Medical Centre (EMC) practices and developments related to private hospital provision in Bangkok.An interpretive methodology was utilised in order to help understand senior nurses’ perceptions underpinning nursing leadership. The scope for this research were EMC teams. The population of interest was made up of 13 senior nurses, encompassing single-site private hospitals in Bangkok. Ten (10) senior-level nursing practitioners at Emergency Trauma Centres were carefully targeted as a resultant sample size.The research outcomes consisted of three (3) Main Themes - Individual Nursing Characteristics; System Qualities; Work Features and ten (10) sub-themes - with 248 dialogue targets.The paper addresses a number of raised areas resulting out of the analysis of the narrative to ascertain implications for managing senior nursing leadership requirements within the EMC of private hospitals and addresses hospital concerns/responses and managerial difficulties related to developing opportunities for senior nurse leadership in private hospital EMCs.
... The privatisation of public utilities has been a widely debated issue at the international level, drawing the attention of policy makers and scholars all around the world (Bortolotti et al., 2004;Estrin et al., 2009;Megginson and Netter 2001;Peters, 2012;Price, 2007;Villalonga, 2000). The debate, which has involved several political and academic stakeholders, has revolved around two opposing arguments: One the one hand, supporters of privatisation see it as a solution to budget constraints and a remedy for poor performance by enterprises owned by the state (Andrews and Dowling, 1998;Boycko et al., 1996;Yarrow, 1986). ...
Article
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This paper revolves around the challenges currently tackled by the energy distribution sector, where infrastructural investments play a vital role in both increasing the industry’s internal efficiency and developing national economies. In natural gas and electricity sectors, the liberalisation process began in Europe at the end of the 1990s has triggered a change in the industry’s competitive framework, encouraging investments by companies aiming at improving their industrial and organisational efficiency. At the same time, liberalisation also brought about a change in the ownership of firms: private and mixed ownership companies are now actively participating in the market, together with state-owned enterprises. In the light of these significant changes, this study is aimed at establishing whether the companies’ propensity to invest in infrastructures is connected with a specific form of ownership. So far, this specific topic has not been thoroughly investigated by empirical studies; this work tries to fill this gap by carrying out an empirical analysis on a sample of Italian energy distribution utilities operating in the natural gas and electricity sector.Keywords: infrastructure investments; energy distribution sector; private and public companies; mixed companies.JEL Classifications: L94, L95, L97, L98, Q48DOI: https://doi.org/10.32479/ijeep.9511
... Since major shareholders have both incentives and resources for controlling management and protecting wealth of minority shareholders. The two prominent theoretical thoughts, Property right theory (Villalonga, 2000) and residual claimant theory (Rowthorn and Chang, 1993) underline that non-SOE's are better than SOE's in both profitability and efficiency. The property right theory claims that right of the shareholders are much clear and more protected in non-SOEs than SOEs. ...
Article
Full-text available
This study explores the impact of state ownership on the performance of Chinese listed firms. This study uses annual data of 143, state-owned 1,235, private enterprises for a period of 2011 to 2015. We use Ordinary Least Square method to find whether firm profitability and ownership are associated with each other or not. The results of whole sample indicate that over all firm performance and state ownership are negatively associated in China. However, the negative connection between state ownership and financial performance changes as we run the regression across different sectors.
... Vergés expresses it as follows, when referring to the comparison of privatised public companies, between before and after privatisation, "from the set of studies available the general conclusion that emerges is that no significant differences of efficiency are observed … between the after and the before for the privatised companies" [Vergés, (2013), p.36]. "Also, ratify these conclusions in Spain, the work of Gamir (1999) and internationally (Kemal, 1996;Halliday and Carruthers, 1996;Villalonga, 2000;Gertler and Kuan, 2002;Cullinane et al., 2005;Sacristan, 2006;Okten and Peren Arin, 2006;Cavaliere and Scabrosetti, 2008)" [Rivera Vicencio, (2017), pp.94-171]. This is how the capitalist economy "neither costs nor social returns enter into the cost-price calculations of private enterprise, unless it is forced by laws and the systematic application of social security principles, as in the case workers' compensation laws" [Kapp, (2006), p.47]. ...
Article
Full-text available
Historically, the government of large corporations (corporate governance) were transforming society as a whole into a government over all others, inducing the development of a series of government apparatuses and knowledge. Having as a central axis the economy, which materialises in neoliberalism, this new governmentality begins its period of consolidation after the abandonment of the gold standard in 1971. In these almost 50 years, it has developed by the hand of corporate governance, the greatest economic inequality, a huge precariousness of the working class and the strong increase in the social costs of capitalism. This paper describes the process of concentration of wealth and its effects on society. During this period, there is also a displacement of the central axis of capitalism and its system of appropriation, as it was the system of capitalist production, by appropriation through the financial-monetary system (indirect appropriation), together with the transfer of state planning to private companies. Finally, this paper describes the weaknesses of the current system of capitalist appropriation and the end of the Anglo-American financial empire.
... According to Mohanty, Nandha and Bota (2010) wealth, and if the companies do not provide a better rate of return than the market, money must be returned to shareholders (Stevens, 2008). According to Villalonga (2000) IOCs possess certain features, such as: private ownership (in the form of tradable shares), takeover threats and the potential for bankruptcy, which helps these companies to align their interests with the shareholders. On the other hand, National Oil Companies (NOCs) are more likely to be driven by the personal or political goals of the country of ownership (Eller, Hartley and Medlock, 2007;Bernard and Weiner, 1996). ...
Thesis
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The purpose of this research is to evaluate whether company size is significant in determining the potential for bankruptcy in the oil and gas industry. More specifically, do larger independent oil and gas companies experience higher z-scores, and therefore a lower risk of bankruptcy, than their smaller competitors? The Altman z-score bankruptcy model is used as the statistical tool for determination of bankruptcy in the sample of independent oil and gas companies. It was found that for the most part, the larger companies did indeed experience less risk of bankruptcy, but the findings were inconclusive.
... Perusahaan yang melakukan diversifikasi unrelated dapat memasuki lebih dari satu pangsa pasar industri untuk mencapai kekuatan pasar yang lebih besar. Keuntungan dengan adanya eksploitasi kekuatan pasar adalah penggunaan alat anti-kompetitif yang tidak dapat digunakan oleh perusahaan tidak terdiversifikasi seperti predatory pricing, kolusi, atau pembelian resiprokal (Scherer, 1980;Saloner, 1987;Villalonga, 2000). Dengan kata lain, perusahaan yang tidak terdiversifikasi tidak mendapatkan keuntungan atas kontrak antar segmen operasi (Chakrabarti, et. ...
Article
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This study examined the moderating effect of efficiency on the relationship between diversification and performance of non-financial service firms that are listed on the Indonesian Stock Exchange from 2013 to 2017. The purpose of this research is to obtain empirical findings of efficiency moderating effect on the relationship between diversification strategy and company performance. There have not been studies conducted in Indonesia before that apply efficiency as a moderating variable. Result of this study will also clarify previous researches that exhibit ambiguous results regarding the correlation between diversification strategy and performance. Method used in the research is multiple linear regression with related and unrelated diversification, whereas efficiency is measured with Data Envelopment Analysis. The result shows that both diversification strategy does not affect the corporate performance significantly, and efficiency does not moderate the relationship between diversification and performance as well. However, there is an indication of, so called, a crossover interaction between efficiency variable and diversification strategy. Precisely, no significant relationship between related diversification and company performance and the significant result of interaction of efficiency and related diversification indicates that related diversification can moderate the relationship between efficiency and performance. The finding suggests for further research to deepen the effect of diversification on the company performance. This study contributes the reduction of its limitation in terms of there are insufficient studies on moderating effect of diversification strategy and the applying of binary variable to measure diversification.
... On the other hand, many people describe it as "grabbing hand" which assumes that firm's profit could be more extracted to some politician purposes (Tian and Estrin, 2008). Theoretically, in the property rights perspective in economics (Martin and Parker, 1997;Villalonga, 2000) and the residual claimant theory (Rowthorn and Chang, 1993), economists indicate the public ownership inefficiency. Empirically, Jiang et al. (2013) show that for SOEs firm, their characteristics can predict external successions, but for non SOEs. ...
Article
Purpose This article studies the impact of micro and macro factors on firm performance in the context of an emerging economy just changed from a subsidized economy to a market economy. Design/methodology/approach The authors carried out an investigation into 30 listed food processing companies in Vietnam from 2014 to 2019. The data are analyzed by using STATA software. In this study, beside the regression analytical technique, the Blinder–Oaxaca decomposition analysis is used to study more deeply the effect of variables on financial performance of food processing companies, so its results are reliable base to give suggestions. Findings The results of empirical research help us to have some following conclusion. First, two variables consisting of total assets turnover ratio (ATR) and growth in sales significantly influence financial performance, when it is measured by return on equity (ROE) or return on sales (ROS). Second, leverage significantly negatively impacts return on sale. Third, there are difference in financial performance and the effect of predictors on dependent variable “ROS” between state-owned enterprises (SOEs) and non SOEs, and the causes come from the component effect. Originality/value In fact, although a range of previous researches on that topic have been carried out, none of them dig deeper reasons resulting to the differences in financial performance between SOEs and non SOEs, whereas Vietnamese economy has just changed to a market economy since 1986, making impacts of State ownership totally different from other countries. In this study, the authors use the t -test and analysis to have more accurate conclusions about that problem.
... In addition, some scholars like Mak and Li (2001) claimed that the role of government seems to be less in tracking their investments; also, they stated that more transparency and tracking of the financial performance of firm owned by government, along with easier to obtain finance, are likely to decrease incentives for these firms to implement a good governance mechanisms. On the other hand, others scholars such as (Fukuda et al., 2018;Villalonga, 2000) who argued that once the firms are owned with a high percentage by government that will enhance the financial performance for these firms as consequences of the efficient management control which will directly reduce of the others stockholders expenses. In this regards, some researcher's studies confirmed that there is a positive relationship between government ownership and financial performance, among these scholars (Razak et al., 2008;Tran et al., 2014;Koji, et al., 2020). ...
Article
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The current study seeks to investigate the relationship between ownership structure concentrations and commercial banks financial performance in one of emerging market (Bahrain). The current study employed panel regression analysis from 2015-2019 estimate the relationships between dependent and independent variables. The findings revealed that there is a positive impact of family, government and institutional ownership on financial performance measured by return on equity. Meanwhile, there is negative impact of family and institutional ownership on financial performance measured by earnings per share and a positive relationship with government ownership. The findings confirmed that the corporate governance implementation and a good ownership structure play a vital role in firm's financial performance through reducing the agency cost. However, the current study suggests for future researches to examine other dependent and independent variables with extension the study duration and tackles other uncovered sectors in this study.
... Some scholars have asserted that State ownership is inefficient and bureaucratic. Villalonga (1999) claims that managers are rarely fired for nonperformance in state-controlled firms. If there is any firing of management, it is not related to its performance (Cragg & Dyck, 1999). ...
Article
Full-text available
This investigation looked at the link between firm ownership characteristics and long-run return on firms that issued equity at the Nairobi Securities Exchange (NSE) in Kenya. The study covered 12 firms that issued shares in the NSE market from 2006-2008. Ownership characteristics included (state ownership, institutional Ownership, foreign Ownership, big five shareholders, market capitalization, age of the firm and Leverage of the firm) in relation to the average return. The study tested whether each of the firm ownership characteristics influenced long-run performance. Annual return for these companies was based on market return for five years after the firm’s equity shares were issued. The long-run performance was compared with three benchmarks, namely, NSE index, CAPM and Matching firms. Seven hypotheses were developed for the study. Simple-liner and multi-linear regression analyses based on panel data were carried out to relate the extended run return on shares issued. The result of the survey showed that issuing firms performed better than non-issuing firms. These issuing firms also performed better in comparison to CAPM. However, the issuing firms performed worse than NSEI. In conclusion, the long-run performance of equity issued at the NSE does not necessarily underperform relative to non-issuing establishments.
... Satu dari beberapa fenomena ekonomi yang paling signifikan baru-baru ini adalah privatisasi perusahaan-perusahaan milik-negara di seluruh penjuru dunia (Boubakri & Cosset, 1998;Villalonga, 2000;Farinos, Garcia, & Ibanez, 2007). Privatisasi merupakan istilah yang memiliki beragam definisi dan atau interpretasi. ...
Article
The main purpose of this study was to find out the effects of public ownership as the result of privatization by initial public offering (IPO) on financial and operational performance in private state owned enterprises (SOE). Target populations of this research were 9 private SOEs. The analysis of the study used partial least square (PLS). The finding of this study showed that public ownership, as the result of privatization, might improve financial and operational performance only at leverage decrease and profitability increase.
... The essence of privatisation is to ensure efficiency and effectiveness in the provision of public utilities and service delivery through high level competition (Obadan, 2000;Ogbuefi et al., 2019). However, scholars like Villalonga (2000), Nwankwo and Richards (2001), Odeh (2011), Iwuoha (2018 among others argue that privatisation is not a sufficient factor for any enterprise to achieve sufficiency, efficiency and good service delivery. They identified corruption, lack of productivity, mismanagement, poverty level and lack of transparency as factors affecting sufficiency, efficiency and good service delivery negatively. ...
Article
This study underscores the contexts and crisis of privatisation in Nigeria's power sector to apprehend the level of prepaid meters distribution to consumers, the conflicting billing methods adopted and its impact on both the electricity consumers and revenue generation stream of the Enugu Electricity Distribution Company (EEDC). The descriptive survey method and correlation design were used, with sample drawn from Enugu metropolis, Nigeria. The results reveal that the introduction of prepaid metering and billing system did not improve electricity power distribution to consumers. There are still huge metering gaps in prepaid meter distribution to consumers resulting in distorted/partial implementation of both prepaid and estimated billing systems at the same time. This leads to imposition of non‐cost reflective tariffs on electricity consumers. It undermines efficiency, encourage corruption, meter scam by EEDC workers and low revenue generation for EEDC. The Nigeria Electricity Regulatory Commission (NERC) should use taskforce to strictly monitor the distribution of prepared meter in Enugu metropolis by the Discos and promptly sanction the EEDC for infractions, to guarantee adequate electricity consumers protection in Nigeria.
... There is a lot of evidence about the effects of material privatisation (e.g. Hodge 2000, PIQUE 2009, Prizzia 2003, Villalonga 2000, Weizsäcker et al., 2005. Here are some of the often reported effects of privatisation measures: ...
Article
Public administration represents operations and practice of the government through management, administration and implementation of government policies having in mind public interests and the society as a whole. However, analysis of the political system and public administration in Bosnia and Herzegovina (BIH) reveals that this definition is rather “modified” when it comes to the mentioned country. Even though public administration reform is one of the priorities for BIH, the reasons why it has not been more successful are post-conflict reconstruction and state building, unique political organisation as a result of a peace agreement, veto mechanisms and ethnic quotas which makes the consensus harder to achieve and delays adoption of important strategies. Even though political elite in BIH is committed to public administration reform and the key reform institutions have been established there is a lack of necessary knowledge and skills, competences and most importantly, political will. However, public administration reform definitely represents one of the key conditions for the future of BIH and its accession to the European Union (EU). Undoubtedly, public administration reform is a complex reform, and in this paper, the focus is on the case study of BIH by identifying its key issues on the way to the EU membership. This paper is based on analytical method with an explorative and descriptive purpose, comparative legal method, literature review method, and finally, synthesis of results, combined with professional insight and conclusions.
... Private provision of railway transport, in contrast, is unlikely to offer comparable individual benefits. Due to the rent-maximizing incentives of private companies, production and operating costs tend to be lower and efficiency higher (e.g., Oum & Yu, 1994;Villalonga, 2000;Vining & Boardman, 1992). Thus, previous research suggests that private firms can produce and provide public services successfully under certain conditions (Andreoni & Bergstrom, 1996;Bagnoli & Lipman, 1992;Lindsay & Dougan, 2013;Montgomery & Richard, 1999;Roberts, 1992;Tabarrok, 1998). ...
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The provision of public goods plays a key role in the survival of leaders in democracies. Assuming that mass rail transport shares many of the characteristics of public goods, we claim that the public provision of railway ser-vices is more beneficial for political leaders in democracies than private provision. To estimate the effect of the type of provision of railway services on leader survival, we use new data on four European democracies that present variation in the public and private ownership of rail miles between 1913 and 1981. We find that the private provision of rail transport increases the hazard rates of leader deposition in these democracies. These results bear crucial implications, as they help to explain the sweeping policies of nationalization of public ser-vices that took place in the first half of the 20th Century in Western Europe.
... Kole and Mulherin (1997) present an extensive sample analysis of the privatization of enterprises in the USA, on the basis of which they reached the conclusion that there is no difference in the effectiveness of state and private enterprises. Meanwhile, Villalonga (2000) gave a list of more than 150 works, where the effectiveness of privatization was compared. This review showed that 75 per cent of the works referred to by the author confirmed the efficiency of private enterprises; while one third of the authors contended that there was no basis for this conclusion. ...
Article
In a survey of 1,182 company executives in China, state-owned enterprises (SOEs) reported less business reductions under COVID-19. This paper examines if SOEs’ superior performance was resulted from government support rather than innate ability of coping with the pandemic. We construct a proxy for firm-level government support using firm's human resources (HR) action taken during the outbreak with firm's 2019 China revenue share as an instrument for the HR action variable. After controlling for the proxy for firm-level government support as well as other observed firm characteristics, we find SOEs in the sample performing significantly worse in the pandemic period.
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Rural marketing is an attractive term today as compared to what it was in the mid and late 80s. While rural income continues to rise the rate of growth has slowed down and market is already seeing signs of demand plummeting in urban centers.The rural markets has been growing steadily since 1980s and is now bigger than the urban markets for both FMCG (35%share of total market) and durables (59%). These facts are substantiated in a study of market growth conducted by various researches. In recent years, rural markets have acquired significance in countries like China and India, as the overall growth of the economy has resulted into substantial increase in the purchasing power of the rural communities. On account of the green revolution in India, the rural areas are consuming a large quantity of industrial and urban manufactured products. By this paper the author has revealed various aspects related to rural consumer behaviour and the strategies to uplift the rural market trends. KEYWORDS: Rural Markets, FMCG, Infrastructure, Consumer Behavior, Agriinputs, Strategies, Credibility.
Chapter
Network industries can be defined as in which a firm or its product consists of many interconnected nodes, a node is a unit of the firm or its product, and the links between nodes define the character of the trade in the industry. Telecommunications, transport, and energy are examples of network industries. Network industries play important roles in the modern economy because the infrastructure and services they provide form the basis of the functioning of modern economies. To improve the functioning and efficiency of these sectors, local and national governments issue some regulations on these sectors. The main objective of these regulations is to ensure that the activities are carried out in the most efficient and effective way possible. The rapid increase in trade due to globalization has made the aviation sector one of the most important elements of the global economy. Therefore, in this study, regulations issued on aviation sector in Turkey are mentioned on the basis of slots, charges, passenger rights, ground handling, and passenger services. Later, an efficiency review analysis is built on studies carried out during the last fifteen years on airports located in Turkey. Then, statistics related to methods, input, and output parameters are provided.
Article
We investigate long-run firm-level productive growth and technological changes and relate these to the formal and informal institutions and related factors. We conclude that persistency of easing of regulations through broader reforms, including privatization and perception of non-reversal of reforms, helped firms achieve prolonged productivity gains—led by technological changes alongside a socially desirable reduction in CO2 emissions due to energy saving, as well as increased labour usage, despite variations in the quality of formal and informal institutions. Broadly, both formal and informal institutions matter for all firms irrespective of productivity levels and technological gains. Government stability, the country's investment climate, socio-economic conditions, and corruption perception are essential in determining long-run productivity growth and technological changes. However, the role of law and order conditions, political constraints, and competitiveness of the political system/process in determining productivity gains and technological improvements varies by firms’ characteristics.
Technical Report
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The Alan Blakeney NDP government of Saskatchewan established the Potash Corporation of Saskatchewan (PCS) in 1975. PCS continued to operate as a Crown Corporation until the Grant Devine Conservative government, elected in 1982, sold a majority of the shares in 1989 and 1991. In April 1994, the final government-owned shares were sold to private investors. The privatization of PCS was the largest provincial privatization in Canadian history and it played a central role in the Devine government’s agenda. This study examines the aggregate economic impact that the privatization of PCS has had, and will have in the future, on the welfare of the citizens of Saskatchewan. Potash mining is a global industry, and potash is found in commercial quantities in only a relatively few places in the world, Saskatchewan chief among them. This study identifies three principles of resource management: (1) the people of Saskatchewan own the underlying potash resource; (2) as owners, the people of Saskatchewan should seek to maximize the income that they and future generations receive from the resource; (3) the government of Saskatchewan should extract any economic value it decides to collect from this resource as efficiently as possible. The study reviews the effects of private versus public ownership on the achievement of productive efficiency and documents the considerable post-privatization performance improvement. The Devine government deserves credit for this. There were extraordinary gains to PCS shareholders after privatization. However, it is less clear how much of these improvements accrued to residents of Saskatchewan. Assessing their share depends on a determination of the residency of the shareholders of the privatized PCS and of the incremental taxes collected by the Saskatchewan government, which accrue to all provincial residents. Regarding share ownership, unfortunately the evidence is incomplete, but ownership did change considerably over time. We do know that by 2010 just less than 50% of shares were owned by Canadians; how many of these were Saskatchewan residents is unknown. Given the sub-optimal potash tax and royalty regimes of all post-privatization Saskatchewan governments, it is clear that few of the performance gains resulted in significant incremental provincial revenues. Finally, we analyze the extent of Saskatchewan’s and PCS’s market power in world potash markets, and consider how privatization might have increased PCS’s ability to earn extraordinary profits from such power. Given the evidence of performance improvement, it seems likely that the potential for increased market power did occur. However, given the inefficiency of the tax and royalty regimes and the low proportion of shares held by Saskatchewan residents throughout the post-privatization period, it is unlikely that the people of Saskatchewan benefited significantly.
Article
Public management scholars have argued that public and private organizations are essentially different and such differences will generate different outcomes in various aspects, such as performance and work-related attitudes. Empirical evidence, however, is not consistent. We investigate how the characteristics of public organizations that distinguish them from private counterparts are associated with work attitudes of employees. We measured three dimensions of publicness―ownership, funding, and control―and tested the association of each dimension of publicness with job satisfaction of managers. Data were collected from a sample of 231 middle-level managers from 129 universities in Korea, being analyzed through OLS regressions and HLM methods. The results show that three dimensions of publicness are independently linked to job satisfaction of managers. Public ownership and the level of control were negatively associated with job satisfaction of managers, but financial dependence on public sources was not significantly related to it.
Article
This paper analyses a process of decentralisation and re-centralisation in China’s railway system between 1978 and 2013 (i.e. Ministry of Railways reform and its end). The Chinese government first decentralised the railway sector, encouraged business diversifications, and incentivised local cadres to mobilise idle productive resources. Many entrepreneurial initiatives, such as the railway express delivery service, have proved successful in adding new profit stream. Born as an ad hoc solution to fix soft budgetary constraints, later it metamorphosed into market-oriented state capitalism. The government later re-centralised the railway express services as the China Railway Express, and the newly recovered entity became a centralised enterprise ( yanqqi 央企), venturing into an international competitive enterprise. The emergence of the China Railway Express suggests that decentralisation in China was not always an end to the property rights rearrangements, and that government was selective in converging to the parallel western privatisation model.
Article
This paper examines privatization as one of the effective tools for increasing the share of the private sector in the economy. The authors analyzed the progress of the second wave of privatization in Kazakhstan, as well as the advantages and risks of privatization. On the basis of the analysis, it was concluded that the privatization process also affects the improvement of the activities of private companies. The authors note that for many companies, even preparation for sale contributes to optimization, development of management and internal control systems, analysis of the internal and external environment. At the same time, in connection with the current pandemic crisis, the authors propose to revise the measures related to privatization and postpone it for at least 2 years.
Article
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A energia elétrica é um insumo indispensável para o desenvolvimento socioeconômico. O Brasil, após os anos 1990, passou por um intenso período de privatizações no setor elétrico e, atualmente, o ambiente do setor convive com empresas públicas e privadas. O objetivo deste trabalho foi comparar o desempenho de empresas públicas e privadas, operantes no setor elétrico brasileiro, entre 2003 e 2013, em termos de liquidez, endividamento e rentabilidade. Para a análise dos dados, foram usados métodos de estatística não paramétrica, por meio de aplicação do Teste U de Mann-Whitney. Os resultados apontaram que as empresas privadas obtiveram melhor desempenho nos quesitos de rentabilidade e liquidez. As empresas públicas apresentaram menor grau de endividamento.
Article
In this article, the authors consider the tools and technologies of decarbonizing the national economy and the possibility of their integration into the legislative framework of the Republic of Kazakhstan, in particular, in the draft of new edition of the Environmental Code of the Republic of Kazakhstan. Particular attention is paid to the study of new tools that contribute to the transition of the economy to a low-carbon development path - the introduction of the best available technologies that allow for the ecological modernization of industrial enterprises which provide low or zero emissions of pollutants.
Article
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This article tests the relationship between ownership and firm performance in emerging countries; Russia, India, and China. Annual financial and accounting data of 213 state-owned and 3,624 non-state-owned enterprises- for the period 2011–2015 are compiled from Orbis. The empirical results show that on average, the firm performance is negatively associated with state-owned enterprises in Russia, India and China. This is also confirmed with country-specific analysis except for Russia. These results suggest that among emerging countries, India and China’s state-owned enterprises are less profitable in comparison to non-state-owned enterprises. Lower profitability of state-owned enterprises is justified by the argument that the main goals of enterprises under state control are not in line.
Article
This paper provides evidence that ownership and organization matters for the efficiency of the provision of public services. The results confirm trade-offs implied by the property rights literature and provide important policy implications regarding the organization of public service provision. We find that pure private ownership is more efficient than pure public ownership, and public ownership is more efficient than mixed ownership. The delegation of management in different legal forms also has an impact, highlighting the importance of the design of the government-operator relationship. We apply a structural approach of a production function estimation, ensuring precise determination of total factor productivity for a panel of German garbage collection firms between 2000-2012, followed by a projection of those total factor productivity estimates on ownership and organization.
Article
This paper aims to analyse the operational performance of French ski resorts by using data envelopment analysis models. The findings show that the hierarchical category data envelopment analysis is more appropriate than the standard one as it takes into account heterogeneity. The impact of the business environment (size, ownership, elevation, and location) on performance level is assessed with efficiency scores that are significantly higher for smaller ski resorts, those that are public managed, and those located at medium elevations. In addition, the results highlight a statistical relation between ski resort location and performance. Finally, the implications of the results and future research perspectives are discussed.
Article
Research Summary This paper investigates the joint effect of ownership type and knowledge transfer on success of change. For knowledge transfer, we include transfer of both tacit and codified knowledge, and for ownership type, we consider state owned, privately founded, and privatized firms. We argue that incentives and monitoring mechanisms will cause a given ownership type to moderate the direct effect of knowledge transfer on success of change. Using data from firms in four transition economy countries, we find that the relationship between knowledge transfer and success of change is stronger for state owned firms compared to privately founded and privatized firms. Managerial Summary The fundamental premise of this paper is that effectiveness of knowledge transfer in determining success of change is moderated by ownership type of a firm. We argue that state owned, privately founded, and privatized firms have distinct incentives and monitoring systems that will moderate the direct relationship between transfer of both tacit and codified knowledge on success of change. Our empirical analysis shows that state owned firms experience a stronger relationship between transfer of knowledge and success of change as compared to privately founded and privatized firms.
Article
We employ 37,987 firms in 30 transition economies to investigate the relation between the origins of private firms and their financing patterns. We find that relative to ab initio (from the beginning) private firms, privatized former state-owned enterprises (SOEs) finance a higher proportion of their fixed assets from bank finance (especially from state-owned banks) and supplier credit. We argue that privatized former SOEs continue to benefit from the political and financial connections established during their SOE era. We document that country governance, financial development and legal origins play an important role in the financing patterns of privatized versus private firms.
Article
This paper investigates the institutional origins of ownership discrimination in bank lending through a staggered quasi-natural experiment: China's Split-share Structure Reform. State-Owned Enterprises (SOEs) have an advantage over non-SOEs in securing external financing to protect investment opportunities from cash flow fluctuations. This financing privilege declined significantly after the reform, which mandatorily converted SOEs' non-tradable state-owned shares into tradable shares, sharply increasing the likelihood of further privatization. Consistent evidence also exists in terms of bank lending behaviors. Further, we show both direct and indirect evidence that the effects were more pronounced among SOEs under higher threats of privatization (e.g., firms with larger increases in tradable shares, smaller workforce, and in industries peripheral to national strategy). The evidence suggests that banks proactively prefer SOEs for the perceived safety of loans under implicit government guarantee; when this privilege disappeared after the reform, banks reacted by allocating credits more fairly. This paper provides new evidence on the bright side of share structure reforms in mitigating credit misallocation and enlightens policy makers to practical resolutions to the financing inefficiency in emerging capital markets.
Book
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Buku ini ditulis dengan harapan bisa memberikan gambaran bagi pembaca tentang manajemen investasi. Pembaca bisa mendapatkan pemahaman mengenai manajemen investasi melalui pendekatan teoritis dan empiris. Pendekatan teoritis dalam buku ini mencakup berbagai konsep teori investasi pada aset finansial. Di lain pihak, pendekatan empiris yang termuat dalam buku ini disajikan dalam bentuk hasil penelitian disertasi yang membahas tentang manajemen investasi pada BUMN Tbk. yang merupakan hasil dari privatisasi di Indonesia. Penulis mengucapkan terima kasih kepada semua pihak yang telah membantu dan mendukung proses penulisan buku ini. Semoga buku ini bermanfaat bagi para pembaca. Penulis menyadari bahwa buku ini mungkin masih terdapat banyak kekurangan. Oleh karena itu, kritik dan saran yang konstruktif serta diskusi ilmiah akan diterima oleh penulis.
Article
Purpose This study aims to examine how evolutionary and ecological forces shape the market strategy and performance of firms after their organizational form was changed by exogenous shock. Design/methodology/approach Hypotheses are developed based on both evolutionary and ecological perspectives and tested using fixed effect logistics models and a sample of 3,110 firms that were privatized during 1998–2007. Findings I find that once the organizational form of firms is changed, the market strategy of organizations is shaped by the population density of their old and new organizational forms in their existing market. Moreover, such a market strategy enhances the survival chance of firms. Originality/value This study contributes to organizational evolution literature by unpacking the evolution process when exogeneous shock to organizational form takes place. It advances both evolutionary economics and organization ecology theory through integrating them to understand the evolution process of organizations. This study also contributes to the privatization literature through examining the ecological forces that shape the restructuring strategy of firms after privatization and the performance implications of such restructuring.
Article
We contribute to research on governance of state-owned electric utilities by examining the implications of oversight by independent versus ‘political’ directors for corporate strategy. While policy think-tanks often recommend that governments appoint independent professional directors to boards of state-owned corporations, governments sometimes select politicians who bring a politically-oriented perspective to their oversight duties. To examine the potential strategic consequences, we draw on a novel survey of 384 directors of municipally-owned local electricity distribution companies in Canada, of which about a third were elected municipal councillors and the remaining were independent business professionals. The survey solicited individual director views about strategic priorities, including mergers and acquisitions, business diversification, and corporate financing options. Our statistical analysis of the survey response data finds that political directors, after controlling for prior executive experience and organizational context, were more risk-tolerant on average than independent directors, as evidenced by a greater willingness to diversify into unregulated business activities and to acquire equity stakes in other utilities; but at the same time, they prioritized enhanced dividend payments to the municipal government over re-investment in the corporation, a potential constraint on future business growth.
Article
By employing a novel, hand-collected sample of withdrawn and completed share issue privatizations, we show that both groups undergo comparable restructuring processes over the 3 years preceding the event. We employ matching procedures to explicitly control for the restructuring effect, isolating the effect of the ownership transfer from state to private investors on corporate policies and performance. We document that, absent the ownership transfer, most of the gains realized during the restructuring process are reabsorbed over the posttreatment period. The transition from state to private ownership thus represents a necessary condition for the long-term success of privatization programs.
Article
Based on an original large-N data set of Serbian firms privatized between 2002 and 2011, and qualitative evidence, this article applies survival modeling to network data to analyze the political foundations of renationalization. I build on embeddedness scholarship and hypothesize that renationalization is influenced by varying patterns of embeddedness of firms in political and ownership networks. In contrast with expectations of the state capture literature, I find that politically connected firms are more likely to be renationalized than non-politicized ones, whereas firms owned by domestic corporate owners are less likely to be renationalized than those owned by non-corporate owners. I theorize my findings as the logic of extraction, showing that renationalization in politically connected firms happens either as an unintended consequence of extraction or of predation, and as the logic of reciprocity, which demonstrates that domestic corporate owners are more likely to avoid renationalization because they can offer favors to political parties.
Book
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У монографії досліджено теоретико-методологічні засади становлення системи державного регулювання інвестиційної діяльності крізь призму еволюційного розвитку економічної думки щодо необхідності й особливостей державного регулювання економічних процесів загалом та інвестицій зокрема. Охарактеризовано категоріальний апарат регулювання інвестиційної діяльності. Досліджено дистрибутивний ефект державного регулювання інвестиційної діяльності в реалізації концепції сталого розвитку. Особливу увагу приділено аналізу державного регулювання інституційних змін інвестиційної діяльності, визначенню ролі держави в інституційних перетвореннях інвестиційної складової цифрового розвитку. Окреслено інституційну архітектоніку цифрових розробок у механізмі залучення інвестицій. Обґрунтовано стратегічні пріоритети модернізації державного регулювання залучення інвестицій до державного сектору в Україні. Видання рекомендоване для науковців, викладачів фінансово-економічних дисциплін, аспірантів, студентів вищих навчальних закладів та практиків у сфері регулювання інвестиційної діяльності.
Book
The aim of this volume is to provide a general overview of the econometrics of panel data, both from a theoretical and from an applied viewpoint. Since the pioneering papers by Edwin Kuh (1959), Yair Mundlak (1961), Irving Hoch (1962), and Pietro Balestra and Marc Nerlove (1966), the pooling of cross sections and time series data has become an increasingly popular way of quantifying economic relationships. Each series provides information lacking in the other, so a combination of both leads to more accurate and reliable results than would be achievable by one type of series alone. Over the last 30 years much work has been done: investigation of the properties of the applied estimators and test statistics, analysis of dynamic models and the effects of eventual measurement errors, etc. These are just some of the problems addressed by this work. In addition, some specific diffi­ culties associated with the use of panel data, such as attrition, heterogeneity, selectivity bias, pseudo panels etc., have also been explored. The first objective of this book, which takes up Parts I and II, is to give as complete and up-to-date a presentation of these theoretical developments as possible. Part I is concerned with classical linear models and their extensions; Part II deals with nonlinear models and related issues: logit and pro bit models, latent variable models, duration and count data models, incomplete panels and selectivity bias, point processes, and simulation techniques.
Book
This completely restructured, updated third edition of The Econometrics of Panel Data, first published in 1992, provides a general overview of the econometrics of panel data, both from a theoretical and from an applied viewpoint. Since the pioneering papers by Kuh, Mundlak, Hoch and Balestra and Nerlove, the pooling of cross section and time series data has become an increasingly popular way of quantifying economic relationships. Each series provides information lacking in the other, so a combination of both leads to more accurate and reliable results than would be achievable by one type of series alone. This third, enhanced edition provides a complete and up to date presentation of theoretical developments as well as surveys about how econometric tools are used to study firms and household's behaviors. It contains eleven entirely new chapters while the others have been largely revised to account for recent developments in the field.
Article
Latin America has in recent years served as a laboratory for testing the limits of privatization. This book examines the lessons of this process in two important sectors: telecommunications and transport (airlines and roadways). It examines why governments privatized these sectors, what strategies they used to divest enterprises, why private investors were drawn to the deals, and - most important - what difference privatization made to the performance of the sectors. Changes in managerial behavior, induced by changes in ownership competition, and regulation, are used to explain the observed outcome. By analyzing the experiences of several countries in multiple sectors, the contributors offer insights for other countries as well as for the privatization of other monopolistic sectors. -from Publisher
Article
The total factor productivity (TFP) for Canadian National (CN) and Canadian Pacific (CP) Rail is estimated for 1956-91, using indices of total output growth compared to total input growth. Several output, input and productivity trends are described. CN and CP show modest productivity growth of just over 3 per cent per year over the full period, but their productivity growth slowed during the 1980s. Recent Canadian rail TFP growth is below that of the US rail industry. An improvement in rail productivity requires major input reduction, especially track.
Chapter
At first blush it is remarkable how little work has been done by economists on a subject so popular and contentious in the political arena. At second blush there is perhaps little surprise given the huge pitfalls of a conceptual and measurement variety and the difficulty, at least in this country, of finding the two species in coexistence in the same product area. The recent surge of cost studies has, belatedly, drawn on the wide variety of institutional forms in certain industries in North America. Even so the coverage is patchy. Electricity has been well studied and there has been some work on water supply, railways, urban transport and airlines. In these areas output is generally subject to user charges. This paper therefore focuses on areas of a semi-commercial’ nature so that health and education are not covered though the temptation could not not be resisted of including an area both fecund in its variety of institutional forms and one where economists seem to have found their true home, refuse collection. There is a problem in specifying what is meant by performance and how it is measured. There is, on the other side of the coin, a problem in knowing what can be deduced from those things that can sometimes be measured, that is relative costs and relative profitability.
Article
In this paper a method of estimating the parameters of a set of regression equations is reported which involves application of Aitken's generalized least-squares [1] to the whole system of equations. Under conditions generally encountered in practice, it is found that the regression coefficient estimators so obtained are at least asymptotically more efficient than those obtained by an equation-by-equation application of least squares. This gain in efficiency can be quite large if “independent” variables in different equations are not highly correlated and if disturbance terms in different equations are highly correlated. Further, tests of the hypothesis that all regression equation coefficient vectors are equal, based on “micro” and “macro” data, are described. If this hypothesis is accepted, there will be no aggregation bias. Finally, the estimation procedure and the “micro-test” for aggregation bias are applied in the analysis of annual investment data, 1935–1954, for two firms.
Article
This article investigates an alternative which permits tax reduction without significant effects on the output of public services: private-sector production of public services. Empirical evidence on a wide variety of services is examined: refuse collection, fire protection, debt collection, health care and hospital services, claims processing, ship repair, and the operation of utilities and airline services. The evidence indicates that the economies achievable are real and not hypothetical; the private-sector provision of public services offers an excellent opportunity for tax reduction without sacrificing services.
Chapter
Society organizes economic activity in different forms chosen in response to varying transaction costs. If owners of enterprises could choose freely among organizational forms, we might expect that the forms observed in particular areas — say between partnership and corporation or small business and monolithic enterprise — were well chosen. Even if such choices were not made consciously, but any form could compete in any arena, forces of natural selection would push toward optimality.1
Article
Transit subsidies increased 15-fold in the US during the 1970s. This article argues that subsidies have exacerbated problems of productivity and cost in mass transit, undermining the potential benefits of subsidies. Reviews nationwide trends in subsidies, compares them with changes in productivity and cost indices, and uses multiple regression analysis on a pooled cross-section sample of 77 transit systems in 1979 and 135 systems in 1980 to measure separate impacts of subsidies on costs. -from Authors
Article
This study is both an attempt to isolate those factors which contribute to the variation in average unit costs of collecting refuse and an attempt to examine the extent to which economies of scale exist. The model employed states that the average per capita cost to a municipality is a function of five categories of factors. Within the categories, a number of variables were postulated to have some significant effect on the per unit cost. However, the unavailability of some data and lack of variation in other data reduced the actual model so that in the final analysis ten variables were found to significantly affect costs. The results from the sample indicated that average costs increased in municipalities with populations of up to 324,000 and only began to fall when cities exceeded this size. A number of other variables exerted in one direction or another a significant effect on costs. A further statistical analysis of this sort may prove to be rather fruitless. What is perhaps needed is a more in-depth descriptive analysis of the institutional implications of the factors affecting the whole operation of refuse collection.
Article
We examine the long-run returns earned by domestic, international, and US investors who purchase shares at the first open-market price in 158 share issue privatizations (SIPs) from 33 countries during the period 1981-1997. We compute one-, three-, and five-year net returns for domestic, international, and US market indexes, and industry-matched comparison samples. We find statistically significant positive net returns for the 158 unseasoned SIPs for all holding periods and compared with all benchmarks. Our findings contrast with the patterns reported in previous research for equity offerings of private firms in the US and other countries.
Article
The notion that competition in the delivery of a public service is beneficial to the citizen-consumer, while self-evident in a common-sense sort of way, and theoretically sound for all but natural monopolies (i.e., those with ever-declining marginal-cost curves), is sometimes viewed with suspicion or hostility by practicing public servants. Impractical, administratively burdensome, wasteful, impossible to implement-are some of the explanations offered to justify the refusal to consider experimenting with or institutionalizing a competitive environment for the delivery of public services.
Article
This article reports findings from an ongoing Canadian study of privatization in the residential solid waste collection industry. A cross-Canada survey conducted during 1981-82 shows that public collection agencies tend to be less efficient than contracted private companies providing similar services. Costs per household are significantly higher where cities collect their own residential solid waste. Public crews tend to be less productive, and their equipment less efficient as well. Two case studies of public to private conversions of Greater Vancouver municipalities show in detail how costs were reduced and crew productivities increased by contracting out the service.
Article
This study is designed to serve as a policy guide for those charged with decisions involving changes in automobile accident reparations systems. Performance of a monopoly government insurer, the Manitoba Public Insurance Corporation, is compared with that of private insurers operating in Alberta. Three criteria important to the insuring public-product, service, and price-are used to evaluate insurer performance. The conclusions are that private insurers appear clearly to have the advantage in product and service but that the government insurer has the advantage in price. The price advantage is attributable in part to charging inadequate premiums, thus creating deficits that are offset by government subsidies.
Article
In this study of 338 inpatient psychiatric departments five hypotheses concerning organizational performance and size are tested and supported. It is found that psychiatric inpatient department performance varies with hospital ownership and is inversely related to department size. It is also found that increases in department size are not marked by changes in the relative size of administrative components. With increases in size, however, private hospitals tend to employ nonprofessional or paraprofessional support staff, while public hospitals are marked by a proliferation of professional staff. Furthermore, as inpatient departments increase in size they tend to increase the number of boundary spanning and buffering structures in existence. Discussed is the extent to which size and organizational ownership affect the performance of the psychiatric department.