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Modern Public Enterprises: Organisational Innovation and Productivity

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  • Caroline Stiel

Abstract

In advanced economies, state-owned enterprises play an important role in sectors of general interest such as energy and water supply. The conditions under which they operate have changed fundamentally since 1998, with new strategies required for firms to preserve market shares in the face of liberalisation and technological innovation. This paper investigates the productivity effect of three strategies in new public management: corporatisation, outsourcing, and partial privatisation. Firm-level productivity is estimated from production data using a control function approach. As most of the firms are typically multiproduct firms, we suggest a method for modelling differences in the product mix and to account for heterogeneous production environments. Using a newly constructed and unique dataset from the German Federal Statistical Office, we find that outsourcing and corporatisation positively impact productivity, while partial privatisation does not increase productivity.

Suggested Citation

  • Caroline Stiel, 2017. "Modern Public Enterprises: Organisational Innovation and Productivity," Discussion Papers of DIW Berlin 1713, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp1713
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    More about this item

    Keywords

    State Ownership; Productivity; Firm Organisation; Structural Production Function;

    JEL classification:

    • L32 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Enterprises; Public-Private Enterprises
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L97 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Utilities: General

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