The objective in this paper is to improve the existing evidence regarding the role ownership plays in economic efficiency. It is pursued through enhancements in modeling, estimation techniques, and experimental design. With respect to modeling, state ownership is explicitly introduced into the simple model of the financially constrained firm in order to trace its implications. In turn, the interrelated, three-equation input demand model that emerges is estimated with consistent panel data techniques, using information gathered from state and private firms that operated in large-scale Greek manufacturing during the 1979-1988 period. The results show that, per unit of output, the amounts of labor, capital, and credits employed by state firms were 15.7, 12.2, and 49.1 percent larger than those employed by private firms in the same industries. Moreover, taking input prices into consideration, these findings indicated that state firms incurred 46.2 percent higher costs per unit of output and that liable for their relative inefficiency were technical, allocative and ownership reasons by contributing respectively 16.3, 25.5 and 4.4 percentage points. Last, but not least, state ownership was found to alter significantly the conventional patterns in which the employment of inputs responds to equity and input price changes. Thus, in contrast to claims made by some researchers, state ownership may influence economic efficiency as well as exercise several other important effects.
Download Info
To download:
If you experience problems downloading a file, check if you have the
proper application to
view it first. Information about this may be contained
in the File-Format links below. In case of further problems read
the IDEAS help
page. Note that these files are not on the IDEAS
site. Please be patient as the files may be large.
Publisher Info
Paper provided by EconWPA in its series Microeconomics with number
0303002.
Length: 31 pages Date of creation: 12 Mar 2003 Date of revision: Handle: RePEc:wpa:wuwpmi:0303002
Note: Type of Document - Acrobat.pdf; prepared on IBM PC - PC; to print on HP/PostScript; pages: 31 ; figures: included. Acrobat PDF document submitted via ftp. Contact details of provider: Web page: http://129.3.20.41
For technical questions regarding this item, or to correct its listing, contact: (EconWPA).
Find related papers by JEL classification: D24 - Microeconomics - - Production and Organizations - - - Production; Capital and Total Factor Productivity; Capacity L33 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Boundaries of Public and Private Enterprise; Privatization; Contracting Out
This paper has been announced in the following NEP Reports:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Cited by: (explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)