Within state-owned enterprises (SOEs), supervisory board mandates are often given to politicians, many of whom are selected through political processes in which competence is not necessarily the decisive factor. This paper analyzes the impact of this form of governance, examining the business competence level of supervisory board members and their influence on the financial performance of 58 state-owned utility companies in Germany from 2011 to 2016 by applying OLS regression. For this purpose, the biographical backgrounds of 3350 supervisory board members were compiled to discern their education, management, and industry experience. Contrary to our hypotheses, the empirical analyses show no effects for any of the competence dimensions on companies’ profitability. In a more detailed analysis, we find that board members with management experience from outside the energy sector seem detrimental to the company, which may indicate self-overestimation bias. This result is robust across different specifications and opens up an interesting new approach to analyzing the impact of board member competence on firm performance. The insignificance of the other competence areas indicates a rather low impact of supervisory boards on SOEs based on their unique institutional setting and in comparison to private sector corporate governance. Overall, this study contributes to both scholars and practitioners by providing new insights in the field of public corporate governance, focusing on the unique situation of the competence of politically connected boards and their influence on SOEs.
We analyse the legitimacy of public enterprises that perform economic activities by focusing on the citizens' subjective preferences, i.e. determining their political legitimacy. Using data from a representative survey conducted among 318 citizens of the German state of Rhineland-Palatine, we explore determinants for the support of either privatisation efforts or the instrumental thesis, a widespread principle in German-speaking countries, which considers public enterprises solely as instruments to fulfil economic policy objectives. Our results indicate that the respondents' perception of the efficiency of public enterprises as well as their personal economic situation are important factors for the support of privatisation. The influential factors for the use of public enterprises as policy instruments are political ideology, the perception of a higher security of supplying goods and services as well as opinions regarding corporate social responsibility. The subjective preferences of a (democratic) country's citizens are thus an important reason why the public sector should or should not play an active part in providing goods and services. This can play an important role when decision makers from the public sector are keen to take into account the citizens' approval or disapproval of privatisation measures.
Zusammenfassung:Die kommunale Verschuldungssituation in Deutschland, insbesondere der starke und asymmetrische Anstieg in kurzfristigen Kassenkrediten in den letzten Jahren, steht verstärkt im Fokus von Politik, Forschung und der Öffentlichkeit. Dies betrifft nebst den Städten und Gemeinden auch die weniger wahrgenommene Landkreisebene. Diese verfügen über einen deutlich geringeren Grad an finanzieller Autarkie. Somit werden politökonomische Einflüsse auf die Kreisfinanzen eher in den jeweiligen Landesregierungen bzw. in der politischen Zusammenarbeit zwischen der Landkreis- und Landesebene vermutet. In dieser Arbeit werden bekannte politökonomische Determinanten der Kommunen und Staaten auf die Besonderheiten der Landkreise angepasst und für alle deutschen Landkreise für die Jahre 1998 bis 2010 empirisch untersucht. Wir finden Hinweise für einen verstärkenden Einfluss von Wahlzyklen der Landesregierung auf die Kassenkreditverschuldung der Landkreise. Ferner wirkt die politische Kooperation zwischen den Landräten und dem Finanzminister eines Bundeslandes verschuldungshemmend. Ebenso finden sich schwache Hinweise für einen positiven Einfluss des Wechsels von Landesregierungen und von Finanzministern auf die Verschuldung. Im Ergebnis unterstreicht die Analyse die Rolle des Landes als Finanzausstatter der Landkreise und somit deren hohe Abhängigkeit von der jeweiligen Landesregierung.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.