a column by Leonardo Baccini, Giammario Impullitti and Edmund Malesky for VOX: CEPR’s Policy Portal
The recent success of China and Vietnam over the past three decades has triggered a debate over ‘state capitalism’ as a viable growth and development model.
This column studies the effect of the 2007 WTO accession on the productivity, profitability, and survival rates of state-owned and private Vietnamese firms. The findings reveal that state-owned enterprises have hampered the efficiency gains brought about by globalisation.
An analysis suggests that productivity gains from trade five years after WTO entry might have been 66% higher in the absence of state-owned firms.
Continue reading
Showing posts with label state-owned_enterprises. Show all posts
Showing posts with label state-owned_enterprises. Show all posts
Thursday, 23 May 2019
Saturday, 23 December 2017
Cost-Benefit Analysis of State-Owned Enterprises
a post by Taz Chaponda in the PFM (Public Financial Management) Blog from the IMF (International Monetary Fund)
The problems associated with state-owned enterprises (SOEs) are well known. They are very costly to run, few of them make profits, or if they do, they tend not to pay dividends on a consistent basis. This problem is more applicable to developing countries and emerging markets than to advanced economies. In the latter, deregulation has sharply reduced the number of SOEs and improved their performance. But in emerging markets, SOEs are still pervasive and their failure can result in huge economic and fiscal costs. Given these risks, why do governments continue to keep them?
To understand the ubiquitous nature of SOEs, it is necessary to go back in history to when governments set up dedicated entities to provide services that were viewed as having some “public good” characteristics, or where natural monopolies existed. It was argued, that certain essential services could not be left to the private sector as it would not supply these services reliably to everyone that needed access (think of public utilities). Another argument was to promote industrialization by investing in strategic sectors through SOEs. Economies in East Asia led the way in this respect.
Continue reading
The problems associated with state-owned enterprises (SOEs) are well known. They are very costly to run, few of them make profits, or if they do, they tend not to pay dividends on a consistent basis. This problem is more applicable to developing countries and emerging markets than to advanced economies. In the latter, deregulation has sharply reduced the number of SOEs and improved their performance. But in emerging markets, SOEs are still pervasive and their failure can result in huge economic and fiscal costs. Given these risks, why do governments continue to keep them?
To understand the ubiquitous nature of SOEs, it is necessary to go back in history to when governments set up dedicated entities to provide services that were viewed as having some “public good” characteristics, or where natural monopolies existed. It was argued, that certain essential services could not be left to the private sector as it would not supply these services reliably to everyone that needed access (think of public utilities). Another argument was to promote industrialization by investing in strategic sectors through SOEs. Economies in East Asia led the way in this respect.
Continue reading
Subscribe to:
Posts (Atom)
