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The Political-Economy Implications of the Transition from State-Owned to Mixed-Owned Enterprises: Evidence from the European Gas Sector

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  • Roberto CARDINALE

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Abstract

This paper analyses how the transition from State-Owned Enterprises (SOEs) to Mixed- Owned Enterprises (MOEs) in the European gas sector affected the European states’ ability to pursue public policy objectives. More specifically, the analysis focuses on the extent to which public and private interests can be reconciled within MOEs’ strategy. The paper suggests that the rise of profitability as the central objective for MOEs has prevented states from pursuing some, though not all, of the policy objectives that they could pursue before the transition. For example, states can no more pursue large-scale plans of economic and technological development through MOEs, or ensure consumers’ price affordability irrespective of market fluctuations. However, states may still be able to positively contribute to energy security thanks to the major shares held in MOEs, for instance by vetoing divestment from import infrastructure. The analysis suggests the need for states to devise alternative ways to pursue their objectives in the framework of national and European energy policy.

Suggested Citation

  • Roberto CARDINALE, 2017. "The Political-Economy Implications of the Transition from State-Owned to Mixed-Owned Enterprises: Evidence from the European Gas Sector," Departmental Working Papers 2017-10, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
  • Handle: RePEc:mil:wpdepa:2017-10
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    File URL: http://wp.demm.unimi.it/files/wp/2017/DEMM-2017_10wp.pdf
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    References listed on IDEAS

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    1. Hans Christiansen, 2011. "The Size and Composition of the SOE Sector in OECD Countries," OECD Corporate Governance Working Papers 5, OECD Publishing.
    2. Paul H. Malatesta & Kathryn L. DeWenter, 2001. "State-Owned and Privately Owned Firms: An Empirical Analysis of Profitability, Leverage, and Labor Intensity," American Economic Review, American Economic Association, vol. 91(1), pages 320-334, March.
    3. Jeffry M. Netter & William L. Megginson, 2001. "From State to Market: A Survey of Empirical Studies on Privatization," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 321-389, June.
    4. Jean-Jacques Laffont & Jean Tirole, 1993. "A Theory of Incentives in Procurement and Regulation," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262121743, March.
    5. Aoife Brophy Haney & Michael G. Pollitt, 2013. "New models of public ownership in energy," International Review of Applied Economics, Taylor & Francis Journals, vol. 27(2), pages 174-192, March.
    6. Davis, Christina & Fuchs, Andreas & Johnson , Kristina, 2014. "State Control and the Effects of Foreign Relations on Bilateral Trade," Working Papers 0576, University of Heidelberg, Department of Economics.
    7. Florio, Massimo, 2013. "Network Industries and Social Welfare: The Experiment that Reshuffled European Utilities," OUP Catalogue, Oxford University Press, number 9780199674855.
    8. Bortolotti, Bernardo & Siniscalco, Domenico, 2004. "The Challenges of Privatization: An International Analysis," OUP Catalogue, Oxford University Press, number 9780199249343.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    State-owned enterprises; Mixed-owned enterprises; Partial privatisation; Golden share; Golden power; Corporate governance; Political economy of gas;

    JEL classification:

    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy
    • P16 - Economic Systems - - Capitalist Systems - - - Political Economy of Capitalism
    • P18 - Economic Systems - - Capitalist Systems - - - Energy; Environment
    • P43 - Economic Systems - - Other Economic Systems - - - Finance; Public Finance
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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