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Infrastructure State-Owned Enterprises : A Tale of Inefficiency and Fiscal Dependence

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Listed:
  • Herrera Dappe,Matias
  • Musacchio,Aldo
  • Pan,Carolina
  • Semikolenova,Yadviga Viktorivna
  • Turkgulu,Burak
  • Barboza,Jonathan

Abstract

This paper examines the performance of infrastructure companies owned by the state, using thenewly created World Bank Database of Infrastructure State-Owned Enterprises (SOEs). The data cover 19 countriesand 135 SOEs between 2000 and 2018. The analysis reveals that infrastructure SOEs are large and have weak financialperformance that generates significant fiscal risk. The paper introduces new measures of financial performance netof fiscal transfers and examines previously uncovered patterns of subsidies by sector. It examines the effect ofstate ownership by comparing the firms in the database with hundreds of comparable private firms, using coarsened exactmatching. The findings show that relative to comparable private firms, infrastructure SOEs are less efficient,represent a larger share of gross domestic product, have larger liabilities as a share of gross domestic product andlarger employment costs as a share of revenues, and yield lower returns on assets.

Suggested Citation

  • Herrera Dappe,Matias & Musacchio,Aldo & Pan,Carolina & Semikolenova,Yadviga Viktorivna & Turkgulu,Burak & Barboza,Jonathan, 2022. "Infrastructure State-Owned Enterprises : A Tale of Inefficiency and Fiscal Dependence," Policy Research Working Paper Series 9969, The World Bank.
    • Handle: RePEc:wbk:wbrwps:9969
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    References listed on IDEAS

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    1. Emin Dinlersoz & Sebnem Kalemli-Ozcan & Henry Hyatt & Veronika Penciakova, 2018. "Leverage over the Firm Life-Cycle, Firm Growth, and Aggregate Fluctuations," NBER Working Papers 25226, National Bureau of Economic Research, Inc.
    2. Thomas Haven & Luis A. Andrés & J. Luis Guasch & Vivien Foster, 2008. "The Impact of Private Sector Participation in Infrastructure : Lights, Shadows, and the Road Ahead," World Bank Publications - Books, The World Bank Group, number 6545.
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    5. Megginson, William Leon, 2005. "The Financial Economics of Privatization," OUP Catalogue, Oxford University Press, number 9780195150629, Decembrie.
    6. Musacchio, Aldo & Pineda, Emilio & Huber, John & Jara, Mauricio & Kim, Hyungon & Ter-Minassian, Teresa & Wagner, Rodrigo, 2019. "Fixing State-Owned Enterprises: New Policy Solutions to Old Problems," IDB Publications (Books), Inter-American Development Bank, number 9965, December.
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    2. Herrera Dappe, Matías & Musacchio, Aldo & Turkgulu, Burak & Pan, Carolina & Barboza, Jonathan & Semikolenova, Yadviga, 2024. "State-owned enterprises as countercyclical instruments: Quasi-experimental evidence from the infrastructure sector," World Development, Elsevier, vol. 179(C).

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