State-owned enterprises, fiscal transparency, and the circumvention of fiscal rules: The case of Germany

Friedrich Heinemann and Justus Nover

No 23-058, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: State-owned enterprises (SOEs) provide opportunities for a more flexible and market-based provision of public services. At the same time, they may impair fiscal transparency and offer politicians discretion in the presence of strict fiscal rules if these only constrain the core udget. Using a comprehensive micro-data set of German SOEs, this paper studies a possible impact of the German debt brake on SOEs by tracking changes in financial indicators at the firm level that would hint to a circumvention of the rule. The identification exploits that the mounting compliance pressures over the lagged implementation of the debt brake from 2010 to 2020 differs across the 16 states. The results show that SOEs in fiscally more constrained states exhibit a stronger decrease in equity and reserves and a higher increase in debt compared to SOEs in less constrained states and the shorter the distance to the 2020 deadline. This result is based on a combined sample of state and municipal SOEs, a finding pointing towards the vertical spillover of a fiscal rule.

Keywords: fiscal rules; extra budgets; Stability and Growth Pact (search for similar items in EconPapers)
JEL-codes: H10 H60 H74 (search for similar items in EconPapers)
Date: 2023
New Economics Papers: this item is included in nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/283578/1/1878451332.pdf (application/pdf)

Related works:
Journal Article: State-owned enterprises, fiscal transparency, and the circumvention of fiscal rules: The case of Germany (2025)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:283578

Access Statistics for this paper

More papers in ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().