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Property rights and transaction costs – The role of ownership and organization in German public service provision

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  • Friese, Maria
  • Heimeshoff, Ulrich
  • Klein, Gordon J.

Abstract

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 and 2012, followed by a projection of those total factor productivity estimates on ownership and organization.

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  • Friese, Maria & Heimeshoff, Ulrich & Klein, Gordon J., 2020. "Property rights and transaction costs – The role of ownership and organization in German public service provision," International Journal of Industrial Organization, Elsevier, vol. 72(C).
    • Handle: RePEc:eee:indorg:v:72:y:2020:i:c:s0167718720300606
    DOI: 10.1016/j.ijindorg.2020.102637
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    Cited by:

    1. Marko Krause & Alexander Lahmann, 2023. "The tax advantage of public firms over private firms in the German household solid waste disposal industry," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 94(2), pages 549-574, June.
    2. Gabriel Natividad, 2022. "Decentralizing investment: Evidence from municipal organization after close elections," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 31(3), pages 734-761, August.

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    More about this item

    Keywords

    Productive efficiency; Refuse collection; Public service;
    All these keywords.

    JEL classification:

    • D2 - Microeconomics - - Production and Organizations
    • H1 - Public Economics - - Structure and Scope of Government
    • L3 - Industrial Organization - - Nonprofit Organizations and Public Enterprise

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