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State-Owned Enterprises and Endogenous Growth

Author

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  • Piotr Matuszak

    (The Polish Academy of Sciences, Institute of Economics)

Abstract

This article analyzes the growth impact of state ownership in enterprises by introducing state-owned enterprises (SOEs) into the endogenous, Romer-type economic growth model. We build on the empirical firm-level analysis showing that SOEs underperform their privately owned counterparts and consider SOEs’ inefficiency and related subsidization in the growth model. Our model predicts that the growth rate is decreasing in the SOE inefficiency and SOE shares in final goods production and R&D sectors. The model helps to shed light on the mechanisms behind empirical facts observed in European economies in the 21st century - lower growth and innovation rates in countries with larger SOE shares.

Suggested Citation

  • Piotr Matuszak, 2023. "State-Owned Enterprises and Endogenous Growth," Central European Journal of Economic Modelling and Econometrics, Central European Journal of Economic Modelling and Econometrics, vol. 15(1), pages 65-89, March.
    • Handle: RePEc:psc:journl:v:15:y:2023:i:1:p:65-89
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    References listed on IDEAS

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    More about this item

    Keywords

    state-owned enterprises; state ownership; Romer model; expanding variety growth model;
    All these keywords.

    JEL classification:

    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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