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https://doi.org/10.1016/j.ruje.2017.06.002
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State ownership and efficiency characteristics
[journal article]
Abstract
This study examines the influence of state participation in the ownership structure of companies on their financial efficiency using a sample of 114 largest companies in Russia. As an indirect indicator of efficiency, we used a variety of financial indicators: revenue per employee (gross margin), re... view more
This study examines the influence of state participation in the ownership structure of companies on their financial efficiency using a sample of 114 largest companies in Russia. As an indirect indicator of efficiency, we used a variety of financial indicators: revenue per employee (gross margin), return on equity, profit margin and debt burden. The effects of direct and indirect state ownership are considered separately. Using econometric analysis, we conclude that the dominance of the block of shares owned by the state has a negative effect on the performance characteristics, and its increase is associated with an increase in the debt burden of the companies. According to our criteria, state-owned enterprises (SOEs) perform worse on average than private companies. The mechanism of how changes in the "real sector" affect profitability is examined particularly closely. The study shows that a change in the profitability of private companies is characterized by a significant dependence on the movement of labor productivity characteristics. At the same time, for SOEs, a similar correlation was not revealed. These companies demonstrated no visible relationship between their profitability and performance characteristics. The study shows that increases in the size of direct government ownership lead to lower labor productivity and profitability; the impact of indirect ownership is, seemingly, more complicated.... view less
Keywords
privatization; profitability; productivity; labor
Classification
National Economy
Free Keywords
state-owned enterprises; private companies; performance; labor productivity; mixed ownership; direct and indirect state ownership
Document language
English
Publication Year
2017
Page/Pages
p. 129-157
Journal
Russian Journal of Economics, 3 (2017) 2
ISSN
2618-7213
Status
Published Version; reviewed
Licence
Creative Commons - Attribution-Noncommercial-No Derivative Works 4.0