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Financial Targeting for Public Enterprise: The Criterion of a Rate of Return to Capital

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  • R. R. Officer

    (Graduate School of Management, University of Melbourne.)

Abstract

The rate of return to capital employed is the most common of the control and perfor Mance measures used in the private sector. It is often suggested that public sector enterprises, particularly statutory trading authorities, should be compelled to adopt a target rate of return to encourage the efficient allocation of resources by such enterprises. This paper outlines the problem of such a control measure for public sector enterprises. It is difficult to conceive of any single line measure of perfor Mance for control that can be adopted for a non-competitive public sector enterprise that does not risk creating more problems than it solves.

Suggested Citation

  • R. R. Officer, 1985. "Financial Targeting for Public Enterprise: The Criterion of a Rate of Return to Capital," Australian Journal of Management, Australian School of Business, vol. 10(2), pages 83-97, December.
    • Handle: RePEc:sae:ausman:v:10:y:1985:i:2:p:83-97
    DOI: 10.1177/031289628501000205
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    References listed on IDEAS

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    1. Robert M. Spann, 1974. "Rate of Return Regulation and Efficiency in Production: An Empirical Test of the Averch-Johnson Thesis," Bell Journal of Economics, The RAND Corporation, vol. 5(1), pages 38-52, Spring.
    2. Gravelle, H S E, 1976. "Public Enterprises under Rate of Return Financial Targets," The Manchester School of Economic & Social Studies, University of Manchester, vol. 44(1), pages 1-16, March.
    3. Leon Courville, 1974. "Regulation and Efficiency in the Electric Utility Industry," Bell Journal of Economics, The RAND Corporation, vol. 5(1), pages 53-74, Spring.
    4. H. Craig Petersen, 1975. "An Empirical Test of Regulatory Effects," Bell Journal of Economics, The RAND Corporation, vol. 6(1), pages 111-126, Spring.
    5. Gravelle, H S E, 1977. "Marginal Cost Pricing under Rate of Return Financial Targets," The Manchester School of Economic & Social Studies, University of Manchester, vol. 45(3), pages 236-240, September.
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    Cited by:

    1. Michael E. Bradbury & Jill Hooks, 2015. "Ownership and Performance in a Lightly Regulated Environment," Australian Accounting Review, CPA Australia, vol. 25(1), pages 100-112, March.

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