Municipal socialism or municipal capitalism? The performance of local public enterprises in Italy

Nicola Curci (), Domenico Depalo and Emilio Vadal� ()
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Emilio Vadal�: Bank of Italy
Authors registered in the RePEc Author Service: emilio vadala', Sr.

No 408, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: This paper evaluates the performance of Italian local public enterprises (LPEs) with respect to their private sector counterparts. We address the following questions: i) do LPEs perform worse than (comparable) private firms?; ii) does the performance gap depend on the ownership structure (the share held by the public) or on the market structure (the degree of competition in the sector)?; iii) which are the main determinants of LPEs' performance in terms of productivity? The main findings � which are robust to the possible endogeneity of the ownership structure � are as follows: i) LPEs perform less well than private companies by about 8 percent in terms of TFP; ii) although both ownership structure and market structure matter, our results suggest that the ownership structure is more important; and iii) the performance gap of LPEs with respect to private firms seems to be driven by over-capitalization rather than by over-employment.

Keywords: local public firm; firm performance; instrumental variables (search for similar items in EconPapers)
JEL-codes: C26 H42 L25 L33 (search for similar items in EconPapers)
Date: 2017-11
New Economics Papers: this item is included in nep-eff, nep-eur and nep-ure
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_408_17

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