The effect of privatisation on performance of state‐owned‐enterprises in Indonesia

Emita W. Astami, Greg Tower, Rusmin Rusmin and John Neilson

Asian Review of Accounting, 2010, vol. 18, issue 1, 5-19

Abstract: Purpose - The purpose of this paper is to investigate whether partially privatised state‐owned‐enterprises (SOEs) perform significantly better than fully SOEs in the developing country of Indonesia. Design/methodology/approach - This study uses a data set of 157 SOEs in Indonesia for the year 2006 to examine the issue of ownership structure and its performance. Findings - Statistical analysis supports the hypothesis that SOEs with private sector ownership have higher levels of performance than those fully owned by the government. There are also significant differences in financial leverage, firm size, assets‐in‐place, financial statement reliability, and industry variances between fully privatised and partially privatised SOEs. Originality/value - These findings support the Indonesian Government move towards further privatisation in that SOEs with at least some private sector ownership have greater performance levels.

Keywords: Indonesia; Public ownership; Private ownership; Privatization; Business performance (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:arapps:v:18:y:2010:i:1:p:5-19

DOI: 10.1108/13217341011045971

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