IDEAS home Printed from https://ideas.repec.org/a/bla/annpce/v95y2024i1p33-66.html
   My bibliography  Save this article

Are governments bad entrepreneurs? On productivity and public ownership in Central European post‐Communist countries

Author

Listed:
  • Philipp Steinbrunner

Abstract

Although Central European post‐communist countries have considerably liberalized energy sectors, privatizations have been poorly implemented establishing legal monopolies and retaining governments' pervasive influence. This study examines the effects of state ownership on productivity and Lerner indices, using a dataset on Central European firms, operating in industries of general interest, from 2009 to 2017. This study contributes to the literature by estimating production functions of energy companies, establishing a link between government ownership, and productivity and Lerner indices, applying continuous measures of state ownership, and evaluating impacts across quantiles. The overall results highlight that state ownership is associated with significant productivity losses, which increase over quantiles, and lower market power.

Suggested Citation

  • Philipp Steinbrunner, 2024. "Are governments bad entrepreneurs? On productivity and public ownership in Central European post‐Communist countries," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 95(1), pages 33-66, March.
    • Handle: RePEc:bla:annpce:v:95:y:2024:i:1:p:33-66
    DOI: 10.1111/apce.12429
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/apce.12429
    Download Restriction: no
    File URL: https://libkey.io/10.1111/apce.12429?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Andrei Shleifer, 1998. "State versus Private Ownership," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 133-150, Fall.
    2. Pierre‐Philippe Combes & Gilles Duranton & Laurent Gobillon & Diego Puga & Sébastien Roux, 2012. "The Productivity Advantages of Large Cities: Distinguishing Agglomeration From Firm Selection," Econometrica, Econometric Society, vol. 80(6), pages 2543-2594, November.
    3. Arnold, Jens M. & Javorcik, Beata S. & Mattoo, Aaditya, 2011. "Does services liberalization benefit manufacturing firms?: Evidence from the Czech Republic," Journal of International Economics, Elsevier, vol. 85(1), pages 136-146, September.
    4. Simeon Djankov & Peter Murrell, 2002. "Enterprise Restructuring in Transition: A Quantitative Survey," Journal of Economic Literature, American Economic Association, vol. 40(3), pages 739-792, September.
    5. Baghdasaryan, Delia & la Cour, Lisbeth, 2013. "Competition, ownership and productivity. A panel analysis of Czech firms," Journal of Economics and Business, Elsevier, vol. 69(C), pages 86-100.
    6. Fons-Rosen, Christian & Kalemli-Ozcan, Sebnem & Sørensen, Bent E. & Villegas-Sanchez, Carolina & Volosovych, Vadym, 2021. "Quantifying productivity gains from foreign investment," Journal of International Economics, Elsevier, vol. 131(C).
    7. Paul Stoneman & Nathan Francis, 1994. "Double Deflation and the Measurement of Output and Productivity in UK Manufacturing 1979-89," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 1(3), pages 423-437.
    8. David E. M. Sappington & Joseph E. Stiglitz, 1987. "Privatization, information and incentives," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 6(4), pages 567-585.
    9. Chad Syverson, 2011. "What Determines Productivity?," Journal of Economic Literature, American Economic Association, vol. 49(2), pages 326-365, June.
    10. Allan Collard-Wexler & Jan De Loecker, 2015. "Reallocation and Technology: Evidence from the US Steel Industry," American Economic Review, American Economic Association, vol. 105(1), pages 131-171, January.
    11. Allen N. Berger & Timothy H. Hannan, 1998. "The Efficiency Cost Of Market Power In The Banking Industry: A Test Of The "Quiet Life" And Related Hypotheses," The Review of Economics and Statistics, MIT Press, vol. 80(3), pages 454-465, August.
    12. M. Diaz & Rosario Sanchez, 2008. "Firm size and productivity in Spain: a stochastic frontier analysis," Small Business Economics, Springer, vol. 30(3), pages 315-323, March.
    13. Paul H. Malatesta & Kathryn L. DeWenter, 2001. "State-Owned and Privately Owned Firms: An Empirical Analysis of Profitability, Leverage, and Labor Intensity," American Economic Review, American Economic Association, vol. 91(1), pages 320-334, March.
    14. Ehrlich, Isaac & Georges Gallais-Hamonno & Zhiqiang Liu & Randall Lutter, 1994. "Productivity Growth and Firm Ownership: An Analytical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 1006-1038, October.
    15. Carmine Ornaghi, 2006. "Assessing the effects of measurement errors on the estimation of production functions," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 21(6), pages 879-891.
    16. James R. Tybout, 2000. "Manufacturing Firms in Developing Countries: How Well Do They Do, and Why?," Journal of Economic Literature, American Economic Association, vol. 38(1), pages 11-44, March.
    17. Julia I. Lane & John C. Haltiwanger & James Spletzer, 1999. "Productivity Differences across Employers: The Roles of Employer Size, Age, and Human Capital," American Economic Review, American Economic Association, vol. 89(2), pages 94-98, May.
    18. Luosha Du & Ann Harrison & Gary Jefferson, 2022. "FDI Spillovers and Industrial Policy: The Role of Tariffs and Tax Holidays," World Scientific Book Chapters, in: Globalization, Firms, and Workers, chapter 9, pages 215-232, World Scientific Publishing Co. Pte. Ltd..
    19. Prabal De & Priya Nagaraj, 2014. "Productivity and firm size in India," Small Business Economics, Springer, vol. 42(4), pages 891-907, April.
    20. Yi Lu Jr. & Linhui Yu Jr., 2015. "Trade Liberalization and Markup Dispersion: Evidence from China's WTO Accession," American Economic Journal: Applied Economics, American Economic Association, vol. 7(4), pages 221-253, October.
    21. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    22. Cole, Matthew A. & Elliott, Robert J.R. & Okubo, Toshihiro & Zhou, Ying, 2013. "The carbon dioxide emissions of firms: A spatial analysis," Journal of Environmental Economics and Management, Elsevier, vol. 65(2), pages 290-309.
    23. Ajayi, Victor & Weyman-Jones, Thomas & Glass, Anthony, 2017. "Cost efficiency and electricity market structure: A case study of OECD countries," Energy Economics, Elsevier, vol. 65(C), pages 283-291.
    24. Chiara Franco & Giovanni Marin, 2017. "The Effect of Within-Sector, Upstream and Downstream Environmental Taxes on Innovation and Productivity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(2), pages 261-291, February.
    25. Daniel A. Ackerberg & Kevin Caves & Garth Frazer, 2015. "Identification Properties of Recent Production Function Estimators," Econometrica, Econometric Society, vol. 83, pages 2411-2451, November.
    26. Derek C. Jones & Niels Mygind, 2002. "Ownership and Productive Efficiency: Evidence from Estonia," Review of Development Economics, Wiley Blackwell, vol. 6(2), pages 284-301, June.
    27. Chiara F. Del Bo, 2013. "Productivity in electricity generation: The role of firm ownership and regional institutional quality," International Review of Applied Economics, Taylor & Francis Journals, vol. 27(2), pages 237-264, March.
    28. Beata Smarzynska Javorcik, 2004. "Does Foreign Direct Investment Increase the Productivity of Domestic Firms? In Search of Spillovers Through Backward Linkages," American Economic Review, American Economic Association, vol. 94(3), pages 605-627, June.
    29. Roman Frydman & Cheryl Gray & Marek Hessel & Andrzej Rapaczynski, 1999. "When Does Privatization Work? The Impact of Private Ownership on Corporate Performance in the Transition Economies," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 114(4), pages 1153-1191.
    30. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
    31. Bogart, Dan & Chaudhary, Latika, 2015. "Off the rails: Is state ownership bad for productivity?," Journal of Comparative Economics, Elsevier, vol. 43(4), pages 997-1013.
    32. Philippe Aghion & Matias Braun & Johannes Fedderke, 2008. "Competition and productivity growth in South Africa," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 16(4), pages 741-768, October.
    33. Oliver Hart & Andrei Shleifer & Robert W. Vishny, 1997. "The Proper Scope of Government: Theory and an Application to Prisons," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 112(4), pages 1127-1161.
    34. Hanousek, Jan & Kočenda, Evžen & Shamshur, Anastasiya, 2015. "Corporate efficiency in Europe," Journal of Corporate Finance, Elsevier, vol. 32(C), pages 24-40.
    35. Jan De Loecker & Pinelopi Koujianou Goldberg, 2014. "Firm Performance in a Global Market," Annual Review of Economics, Annual Reviews, vol. 6(1), pages 201-227, August.
    36. Francesco Daveri & Rémy Lecat & Maria Laura Parisi, 2016. "Service Deregulation, Competition, and the Performance of French and Italian Firms," Scottish Journal of Political Economy, Scottish Economic Society, vol. 63(3), pages 278-302, July.
    37. Meletiou, Alexis & Cambini, Carlo & Masera, Marcelo, 2018. "Regulatory and ownership determinants of unbundling regime choice for European electricity transmission utilities," Utilities Policy, Elsevier, vol. 50(C), pages 13-25.
    38. Qichang Ye & Zongling Xu & Dan Fang, 2012. "Market structure, performance, and efficiency of the Chinese banking sector," Economic Change and Restructuring, Springer, vol. 45(4), pages 337-358, November.
    39. Nigel Driffield & Jun Du, 2007. "Privatisation, State Ownership and Productivity: Evidence from China," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 14(2), pages 215-239.
    40. Warzynski, Frederic, 2003. "Managerial change, competition, and privatization in Ukraine," Journal of Comparative Economics, Elsevier, vol. 31(2), pages 297-314, June.
    41. Rosario Crinò & Paolo Epifani, 2012. "Productivity, Quality and Export Behaviour," Economic Journal, Royal Economic Society, vol. 122(565), pages 1206-1243, December.
    42. Tomiura, Eiichi, 2007. "Foreign outsourcing, exporting, and FDI: A productivity comparison at the firm level," Journal of International Economics, Elsevier, vol. 72(1), pages 113-127, May.
    43. Raimund Scheffler & Karl-Hans Hartwig & Robert Malina, 2013. "The Effects of Ownership Structure, Competition, and Cross-Subsidisation on the Efficiency of Public Bus Transport: Empirical Evidence from Germany," Journal of Transport Economics and Policy, University of Bath, vol. 47(3), pages 371-386, September.
    44. Antonio Bayeh & Mohammad Bitar & Radu Burlacu & Thomas Walker, 2021. "Competition, securitization, and efficiency in US banks," Post-Print hal-03981365, HAL.
    45. Nicola Commins & Seán Lyons & Marc Schiffbauer & Richard S.J. Tol, 2011. "Climate Policy & Corporate Behavior," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4), pages 51-68.
    46. Takehiko Yasuda, 2005. "Firm Growth, Size, Age and Behavior in Japanese Manufacturing," Small Business Economics, Springer, vol. 24(1), pages 1-15, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Philipp Steinbrunner, 2023. "I want a quiet life! On productivity and competition in the Central European energy sector," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 31(2), pages 403-428, April.
    2. Philipp R. Steinbrunner, 2022. "Boon or bane? On productivity and environmental regulation," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 24(3), pages 365-396, July.
    3. Philipp R. Steinbrunner, 2023. "May It Be a Little Bit More of Market Power? On Productivity Growth and Competition," Journal of Industry, Competition and Trade, Springer, vol. 23(3), pages 123-170, December.
    4. Bogart, Dan & Chaudhary, Latika, 2015. "Off the rails: Is state ownership bad for productivity?," Journal of Comparative Economics, Elsevier, vol. 43(4), pages 997-1013.
    5. Huobao Xie & Weiwei Yang & Qingyuan Li, 2022. "Can New Private Shareholders Help Improve SOEs' Total Factor Productivity? Evidence from the Chinese Listed SOEs," Annals of Economics and Finance, Society for AEF, vol. 23(1), pages 23-62, May.
    6. Orlic, Edvard & Hashi, Iraj & Hisarciklilar, Mehtap, 2018. "Cross sectoral FDI spillovers and their impact on manufacturing productivity," International Business Review, Elsevier, vol. 27(4), pages 777-796.
    7. Alpysbayeva, Dinara & Vanormelingen, Stijn, 2022. "Labor market rigidities and misallocation: Evidence from a natural experiment," Labour Economics, Elsevier, vol. 78(C).
    8. Richter, Philipp M. & Schiersch, Alexander, 2017. "CO2 emission intensity and exporting: Evidence from firm-level data," European Economic Review, Elsevier, vol. 98(C), pages 373-391.
    9. Stiebale, Joel & Vencappa, Dev, 2018. "Acquisitions, markups, efficiency, and product quality: Evidence from India," Journal of International Economics, Elsevier, vol. 112(C), pages 70-87.
    10. Abebe, Girum & McMillan, Margaret & Serafinelli, Michel, 2022. "Foreign direct investment and knowledge diffusion in poor locations," Journal of Development Economics, Elsevier, vol. 158(C).
    11. Bournakis, Ioannis & Tsionas, Mike, 2022. "Productivity with Endogenous FDI Spillovers: A Novel Estimation Approach," International Journal of Production Economics, Elsevier, vol. 251(C).
    12. Laura Alfaro & Maggie X. Chen, 2013. "Market Reallocation and Knowledge Spillover: The Gains from Multinational Production," Working Papers 2013-13, The George Washington University, Institute for International Economic Policy.
    13. Bruno Merlevede & Angelos Theodorakopoulos, 2018. "Productivity Effects of Internationalisation Through the Domestic Supply Chain: Evidence from Europe," Working Papers of VIVES - Research Centre for Regional Economics 627689, KU Leuven, Faculty of Economics and Business (FEB), VIVES - Research Centre for Regional Economics.
    14. Emir Malikov & Jingfang Zhang & Shunan Zhao & Subal C. Kumbhakar, 2023. "Accounting for Cross-Location Technological Heterogeneity in the Measurement of Operations Efficiency and Productivity," Papers 2302.13430, arXiv.org.
    15. Cullmann, Astrid & Stiel, Caroline, 2022. "Cost and productivity effects of demographic changes on local water service," Utilities Policy, Elsevier, vol. 79(C).
    16. Stefania Lovo & Gonzalo Varela, 2022. "Internationally Linked Firms and Productivity in Pakistan: A Look at the Top End of the Distribution," Journal of Development Studies, Taylor & Francis Journals, vol. 58(10), pages 2110-2131, October.
    17. Mion, Giordano & Jacob, Nick, 2020. "On the productivity advantage of cities," CEPR Discussion Papers 14644, C.E.P.R. Discussion Papers.
    18. Jaan Masso & Amaresh K Tiwari, 2021. "Productivity Implications Of R&D, Innovation And Capital Accumulation For Incumbents And Entrants: The Case Of Estonia," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 130, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    19. Mauro Caselli & Arpita Chatterjee & Shengyu Li, 2023. "Productivity and Quality of Multi-product Firms," Discussion Papers 2023-10, School of Economics, The University of New South Wales.
    20. Bricongne, Jean-Charles & Delpeuch, Samuel & Lopez-Forero, Margarita, 2023. "Productivity slowdown and tax havens: Where is measured value creation?," Journal of International Economics, Elsevier, vol. 143(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:annpce:v:95:y:2024:i:1:p:33-66. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=1370-4788 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.