Modern Public Enterprises: Organisational Innovation and Productivity

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.

Public Versus Private Management in Water Public Services: Taking Stock, Looking Ahead

“…Garcıa-Sanchez (2006), by using DEA with the data of 24 water utilities, cannot find any efficiency differences between publicly and privately owned companies in Spain. Stiel (2017), with a newly constructed and unique dataset from the German Federal Statistical Office, investigates the link between organizational innovation and productivity by focusing on three elements, namely, corporatization, outsourcing, and partial privatization. The data comprised 2,325 German state-owned firms for energy and water supply between 2003 and 2014 (German energy and water firms are multiproduct firms).…”