Listed public–private enterprises: stock market information, agency costs and productive efficiency outcomes

Abstract

PurposeThis paper addresses the social value of commercial enterprises that are jointly owned by a government and private sector investors and where the shares are listed on a stock exchange: thus, “listed public–private enterprises” (LPPEs). The theoretical part of the paper addresses how differences in ownership patterns influence the behavior and performance of LPPEs.Design/methodology/approachWe develop a conceptual taxonomy, drawing on the empirical evidence on the behavior and performance of public–private hybrid enterprises and on the application of agency theory to that evidence. The taxonomy discussion predicts how different ownership patterns affect enterprise productive efficiency and the ability of governments to achieve social goals through LPPEs. We review the empirical literature on government enterprise ownership and on the concentration of private share ownership to deduce how these matter for owner and managerial behavior and productive efficiency. We review the literature that considers the informational content that listing of an enterprise's shares on a stock exchange can provide to enterprise owners, managers and other domestic audiences with a policy interest. We employ a social welfare perspective to derive policy implications as to when the LPPE governance structure is most appropriate.FindingsWe show how the monitoring and performance weaknesses of state ownership are offset by some private ownership, particularly when combined with listing on a stock exchange. We demonstrate the effects of different governance structures on enterprise productive efficiency. We find that the LPPE structure is particularly appropriate as an alternative to nationalization or to full privatization and regulation of natural monopoly public utilities, and as an alternative to full private ownership and taxation of non-renewable natural resource extractive enterprises.Originality/valueThis paper explicitly addresses the question of why and how the combination of government ownership, private investor ownership and listing on an exchange is socially valuable in providing information on productive efficiency to governments.

The effect of corporate governance, corporate social responsibility and information asymmetry on the value of Indonesian-listed firms

“…publicly owned by less than 5%), who generally have nonprofit motives (e.g. political and strategic) that can conflict with firm value maximization and produce free-rider problems regarding monitoring mechanisms (Dwivedi and Jain, 2005; Vining et al , 2022). Thus, it is important for Indonesian firms to align their business strategies (i.e.…”

Guest editorial: Rethinking the state of the administrative state: Is the state back in?

“…The first paper by Vining et al (2022) addresses what the authors describe as the social value of commercial enterprises that are jointly owned by a government and private sector investors. While not explicitly focusing on the return of the state in development, the paper highlights the importance role of the state in public-private hybrid enterprises.…”

Mekanisme Pemantauan Yang Efektif Dalam Kondisi Financial Distress

“…Berdasarkan data, kepemilikan pemerintah rata-rata dalam perusahaan yang tercatat di BEI Indonesia sejumlah 0.04,149 % dari perusahaan obsevasian. Vining et al (2021)) menyatakan bahwa walaupun kepemilikan pemerintah kecil dalam perusahaan, namun masih berpotensi menjalankan fungsinya sebagai pemonitor perilaku dan kinerja operasional perusahaan. Hasil menunjukkan proporsi kepemilikan yang kecil di Indonesia tidak membuktikan kemampuan pemerintah memonitor kondisi di saat krisis.…”