Property Rights Versus Public Spirit: Ownership and Efficiency of U.S. Electric Utilities Prior to Rate-of-Return Regulation

Hausman, William J.; Neufeld, John L.

doi:10.2307/2109565

Cited by 38 publications

(14 citation statements)

References 23 publications

Supporting

Mentioning

Contrasting

Unclassified

Order By: Relevance

“…While some studies argue that public ownership decreases firm inefficiency (e.g. Hausman and Neufeld 1991;Knittel 2002), most existing studies find that public ownership increases firm inefficiency. For example, according to Berger et al (2005), the differences in the goals of public owners and firm managers cause agency costs and inefficiency, and because governments are interested in social or political matters rather than the profits of individual firms, they sometimes overlook the firm's internal inefficiency.…”

Section: Public Involvementmentioning

confidence: 99%

The effect of public involvement on firm inefficiency: evidence using Japanese private firms

Nakamura

2010

Rev Manag Sci

View full text Add to dashboard Cite

The purpose of this paper is to investigate the effect of public involvement on firm inefficiency. Public involvement is defined as the actions taken by governments to control firm management, as expressed in regulation and public ownership. We make the following three contributions. First, we show public involvement is an important determinant of the inefficiency of private firms. Although public involvement has been shown to influence firm behavior in public or regulated sectors, existing studies in the private sector tend to ignore its effects. Second, we analyze firm inefficiency rather than firm performance by focusing on cost factors. Previous work tends to use performance measures such as return on assets or return on equity rather than inefficiency measures to judge a firm's management level. Performance measures are problematic, however, in that they are affected by not only cost factors but also demand factors. Therefore, we must separate these factors when we analyze a firm's management. Third, we use a stochastic cost frontier model for the estimation. Although this is a suitable approach for estimating firm inefficiency, it is rarely used for private firms. Our results suggest that public ownership increases firm inefficiency while regulation decreases firm inefficiency. It is also clear that the effect of public ownership is not significant in the manufacturing industry, while it is strongly significant in the nonmanufacturing industry. This shows the importance of studying the effect of public involvement in the private sector.

show abstract

Section: Public Involvementmentioning

confidence: 99%

The effect of public involvement on firm inefficiency: evidence using Japanese private firms

Nakamura

2010

Rev Manag Sci

View full text Add to dashboard Cite

show abstract

“…Large part of the empirical studies on the comparative performance of SOEs focuses on utilities, most often in non-competitive markets, where firms have a natural or spacial monopoly (typically, electric and water utilities), or where there is a regulated duopoly (often this has been the case of airlines and railroads), or where output cannot be priced by competitive forces (e.g., health-related services). Representative works include, among others, Pescatrice and Trapani (1980), Atkinson and Halvorsen (1986), Hausman and Neufeld (1991), Ehrlich et al (1994), La Porta and López-de-Silanes (1999)). Notwithstanding a few exceptions, the majority of available studies shows that SOEs are less efficient than POEs, efficiency commonly being measured by short-term performance indicators such as returns on assets, returns on sales, and net income (see Vining and Boardman (1992) for a survey covering 90 comparative studies, Megginson and Netter (2001) for a literature review on performance changes of privatized companies, and Djankov and Murrell (2002) for quantitative investigations on firm restructuring in transition economies).…”

Section: Introductionmentioning

confidence: 99%

Innovation in State-Owned Enterprises: Reconsidering the Conventional Wisdom

Belloc

2014

Journal of Economic Issues

View full text Add to dashboard Cite

A very well established economic literature maintains that State-owned enterprises (SOEs) are inefficient comparatively to privately-owned ones (POEs). In this paper we argue that SOEs' inefficiency is not due to the State ownership per se, rather it is caused by some conditions other than ownership which SOEs often, but not necessarily, relate to. In particular, we focus on dynamic efficiency -specifically, the production of technological innovation -of SOEs in manufacturing industries, where SOEs should contend with POEs in a competitive environment. We suggest that targeted measures aimed at increasing managers' commitment to long-term investment strategies and at reducing corruption and political interference, though being complex and difficult to implement, can be much more (positively) incisive on long-run technical progress than the simple privatization of companies. This leaves room for exploration and implementation of policies that might reconcile State ownership and market competition in industrial sectors.Keywords: State-owned enterprises, innovation, privatization.JEL classification: H11, L33, O31, P12. * Department of Economics, University "G. d'Annunzio", Viale Pindaro 42 -65127 Pescara, Italy (email: f.belloc@unich.it). I certify that I have the right to deposit the contribution with MPRA.

show abstract

“…Meyer (1975) compared municipal and private electric utility costs and found municipals have lower, not higher, costs. Hausman and Neufeld (1991) also find publicly owned electric utilities are more efficient than privately-owned electric utilities. Atkinson and Halvorsen (19861, and Ftire, Grosskopf and Logan (1985) conclude that municipal and private electric utilities are equally efficient.…”

Section: Review Of the Literaturementioning

confidence: 95%