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Modern Public Enterprises: Organisational Innovation and Productivity

Caroline Stiel

No 1713, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: In advanced economies, state-owned enterprises play an important role in sectors of general interest such as energy and water supply. The conditions under which they operate have changed fundamentally since 1998, with new strategies required for firms to preserve market shares in the face of liberalisation and technological innovation. This paper investigates the productivity effect of three strategies in new public management: corporatisation, outsourcing, and partial privatisation. Firm-level productivity is estimated from production data using a control function approach. As most of the firms are typically multiproduct firms, we suggest a method for modelling differences in the product mix and to account for heterogeneous production environments. Using a newly constructed and unique dataset from the German Federal Statistical Office, we find that outsourcing and corporatisation positively impact productivity, while partial privatisation does not increase productivity.

Keywords: State Ownership; Productivity; Firm Organisation; Structural Production Function (search for similar items in EconPapers)
JEL-codes: L32 D24 L24 L97 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cse and nep-ino
Date: 2017
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