Municipal Socialism or Municipal Capitalism? The Performance of Local Public Enterprises in Italy

Curci, Nicola; Depalo, Domenico; Vadalà, Emilio

doi:10.2139/ssrn.3082198

Cited by 7 publications

(6 citation statements)

References 38 publications

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“…23 For example, a significant fraction of SOEs operate in local 22 Backed with Matsa and Miller (2013) findings for Norway that firms affected by gender quotas undertake fewer workforce reductions, one may explain this finding by the lower willingness to shed labour in companies with a more gender-balanced governance. 23 See, e.g., Curci et al (2017) for the assessment of Italian local public enterprises' performance relative to the private sector firms. Notes: * denotes significance at 10%, ** significance at 5% and *** significance at 1%.…”

Section: Effects On Quality Of Public Servicesmentioning

confidence: 99%

Board Composition and Performance of State-owned Enterprises: Quasi-experimental Evidence

Baltrunaite

Cannella²,

Mocetti

et al. 2021

SSRN Journal

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The quality of governance crucially affects corporate outcomes, and may be particularly important for state-owned enterprises (SOEs) not disciplined by market competition forces. We examine the impact of board composition on the performance of companies controlled by public entities in Italy. For this purpose, we exploit a reform-induced exogenous change in board composition, aimed at increasing female representation and at reducing the revolving-door phenomenon. The law's provisions were binding for SOEs, but not for companies with a minority share of public ownership, allowing us to adopt a difference-in-differences estimation. The results show that female presence on the boards of directors of SOEs has increased, while that of former politicians has decreased. The new directors have mostly replaced older and less talented men, thereby rejuvenating the boards and improving their quality. To assess the effects of the board shake-up on firm performance, we analyse companies' balance sheets and survey information on citizens' satisfaction with the provision of local public services and on objective measures of their quality. While we detect no significant effects on firm productivity, we find that profitability increases and leverage decreases, thereby reducing corporate credit risk. Finally, there is evidence consistent with an improvement in the quality of SOEs' output.

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Section: Effects On Quality Of Public Servicesmentioning

confidence: 99%

Board Composition and Performance of State-owned Enterprises: Quasi-experimental Evidence

Baltrunaite

Cannella²,

Mocetti

et al. 2021

SSRN Journal

View full text Add to dashboard Cite

show abstract

“…Secondly, the presence of a more complex principal-agent chain (general public, public sector administrators, supervisory board and board of directors, CEO and professional management) can be cause of unclear lines of responsibility, lack of accountability and reduced democratic transparency (Osculati & Zatti, 2005;Klein, 2012;Saussier & Klein, 2014;Tõnurist & Karo, 2016;Curci et al, 2017;Bergh et al, 2019). Actually, in the case of a corporatized company there is (at least) a third party that intervenes between the principal and the agent (Osculati & Zatti, 2005;Bergh et al, 2019 23 ): the company board of directors and top management, often made up of members with a political background and/or directly appointed by the political shareholder.…”

Section: Potential and Pitfallsmentioning

confidence: 99%

“…Therefore, even evaluation criteria and indicators are usually those used for private enterprises. For example, Curci et al (2017) evaluate the performance of Italian local public enterprises in terms of operational efficiency (total factor productivity) and profitability (return on asset-ROA, equity-ROE and investments-ROI); Baum et al (2019) asses corruption effects on the performance of POEs considering as key performance indicators profitability (return on equity and operating profit per sales) and productivity and efficiency (sales per worker and labor costs). A similar approach can be found in Mocetti & Roma (2020) who evaluate the effect of the presence of politicians in the board of directors of POEs on their performance, measured through return on sales and the incidence of labor costs on sales.…”

Section: Box 1 Principles and Operative Recommendation For Corruption...mentioning

confidence: 99%

Public-Owned Enterprises (POEs)

Zatti¹

2021

CIRIEC Studies Series

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The second Chapter gives an overview of the main analytical approaches adopted in the rest of the analysis, providing also a brief historical reconstruction of the role of Public Owned Enterprises (POEs). The examination shows how, within a general pathway characterized by several stops and goes and changes of course, POEs have more recently become a widespread and specific way to manage public functions with respect to both internal management and full outsourcing. This phenomenon, often called satellizzation or corporatization, has thus attracted increasing interest by scientific studies, emphasizing at the same time positive aspects and pitfalls. Furthermore, the peculiarities of the links and inter-relationships among POEs, governance and corruption are presented, focusing on the guidelines and operative instructions elaborated by many international organizations and institutions to enhance anticorruption and integrity in POEs.

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“…The rate of birth of new POEs has been characterized in the last decades by a reverse U-shaped curve (Figure 2), with an increasing trend till the first years of the 20th century and a clear decline in the more recent period. As a result, a plethora of publicly-and semi-publicly-owned undertakings emerged, particularly at the regional and municipal level, active in several areas: services instrumental to the public administration, administrative functions, management of state assets, network industries or other services of general interest, but even provision of services on the open market 5 (Karantounias & Pinelli, 2016;Curci et al, 2017;Corte dei Conti, 2019;Mocetti & Roma, 2020). POEs are numerous and difficult to monitor, even due to the presence of complex and intricate ownership relationships.…”

Section: Poes In Italy: a General Overviewmentioning

confidence: 99%

The case of Italy

Zatti¹

2021

CIRIEC Studies Series

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The third Chapter depicts the interconnections between the two themes (bribery and anti-corruption policies, on the one hand, and the role of public controlled entities, on the other) in the Italian case. Italy turns out to be an interesting case study because, on the one hand, it is among the worst performing countries in the G7 and the EU members in terms of corruption and, on the other, it has experienced a strongly proliferation of Public Owned Enterprises (POEs) during the last two or three decades, involving nearly all activity sectors of the economy. This process is deemed to have weakened the chain of control on shared units, delegating relevant financial and political decisions to a milieu of ambiguity and uncertain accountability (the ‘escape’ argument). A progressive change of direction occurred more recently, when corporatized public enterprises have been submitted to specific and increasing limits, including transparency and anti-corruption policies. The anticorruption package, adopted in Italy starting with 2012, has promoted important steps in this direction, yet the effects of these new measures have not been resolutive, and many challenges are still open.

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Municipal Socialism or Municipal Capitalism? The Performance of Local Public Enterprises in Italy

Cited by 7 publications

References 38 publications

Board Composition and Performance of State-owned Enterprises: Quasi-experimental Evidence

Board Composition and Performance of State-owned Enterprises: Quasi-experimental Evidence

Public-Owned Enterprises (POEs)

The case of Italy

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