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State-Owned Enterprises as Countercyclical Instruments : Experimental Evidence from the Infrastructure Sector

Author

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

Abstract

This paper examines the effects of a negative macroeconomic shock on the financial performance ofstate-owned enterprises (SOEs) in infrastructure. It exploits the differential effects of a drastic fall in oilprices (in 2014–15) on SOEs in energy-rich countriesrelative to SOEs in non-energy-rich countries, matching firms based on their fuel expense ratio. The results—basedon a balanced sample using coarsened exact matching and a differences-in-differences estimation—indicate that fullyowned SOEs (FSOEs) that suffered a negative macroeconomic shock performed worse than those that did not. FSOEs thatsuffered a shock also received large fiscal transfers from the government to cope with the shock for three years afterthe shock. Despite the transfers, they reduced their capital expenditures as a consequence of the shock.

Suggested Citation

  • Herrera Dappe,Matias & Musacchio,Aldo & Pan,Carolina & Semikolenova,Yadviga Viktorivna & Turkgulu,Burak & Barboza,Jonathan, 2022. "State-Owned Enterprises as Countercyclical Instruments : Experimental Evidence from the Infrastructure Sector," Policy Research Working Paper Series 9971, The World Bank.
    • Handle: RePEc:wbk:wbrwps:9971
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    References listed on IDEAS

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