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The effect of privatisation on performance of state‐owned‐enterprises in Indonesia

Author

Listed:
  • Emita W. Astami
  • Greg Tower
  • Rusmin Rusmin
  • John Neilson

Abstract

Purpose - The purpose of this paper is to investigate whether partially privatised state‐owned‐enterprises (SOEs) perform significantly better than fully SOEs in the developing country of Indonesia. Design/methodology/approach - This study uses a data set of 157 SOEs in Indonesia for the year 2006 to examine the issue of ownership structure and its performance. Findings - Statistical analysis supports the hypothesis that SOEs with private sector ownership have higher levels of performance than those fully owned by the government. There are also significant differences in financial leverage, firm size, assets‐in‐place, financial statement reliability, and industry variances between fully privatised and partially privatised SOEs. Originality/value - These findings support the Indonesian Government move towards further privatisation in that SOEs with at least some private sector ownership have greater performance levels.

Suggested Citation

  • Emita W. Astami & Greg Tower & Rusmin Rusmin & John Neilson, 2010. "The effect of privatisation on performance of state‐owned‐enterprises in Indonesia," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 18(1), pages 5-19, May.
    • Handle: RePEc:eme:arapps:v:18:y:2010:i:1:p:5-19
    DOI: 10.1108/13217341011045971
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    References listed on IDEAS

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    Cited by:

    1. Taghizadeh-Hesary, Farhad & Yoshino, Naoyuki & Kim, Chul Ju & Mortha, Aline, 2019. "A Comprehensive Evaluation Framework on the Economic Performance of State-Owned Enterprises," ADBI Working Papers 949, Asian Development Bank Institute.
    2. Rakhman, Fuad, 2018. "Can partially privatized SOEs outperform fully private firms? Evidence from Indonesia," Research in International Business and Finance, Elsevier, vol. 45(C), pages 285-292.
    3. Priya Mandiratta & G.S. Bhalla, 2017. "Pre and Post Disinvestment Performance Evaluation of Indian CPSEs," Management and Labour Studies, XLRI Jamshedpur, School of Business Management & Human Resources, vol. 42(2), pages 120-134, May.
    4. Brahmana, Rayenda Khresna & Setiawan, Doddy & Hooy, Chee Wooi, 2014. "Diversification strategy, Ownership Structure, and Firm Value: a study of public‐listed firms in Indonesia," MPRA Paper 64607, University Library of Munich, Germany.

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