Does State Ownership Have Limits in Romania?
This paper assesses the performance of Romanian state-owned enterprises with various degrees of ownership (minority owned with 10 to 24.9 percent stakes, minority owned with 25 to 49.9 percent stakes, and majority owned with at least 50 percent ownership stakes) and control levels (central versus local state-owned enterprises and directly versus indirectly owned state-owned enterprises) relative to privately owned enterprises. The paper uses the Romanian firm-level data from the Ministry of Finance covering enterprises of all sizes from 2011 to 2020, combined with the new World Bank Businesses of the State dataset, which tracks ownership of state business entities with at least 10 percent stake in Romania. The paper analyzes whether various degrees of state ownership and levels of control matter for state-owned enterprises’ performance. The paper also assesses whether Romanian state-owned enterprises were able to act as stabilizers during the early period of the COVID-19 pandemic, and how the presence of state-owned enterprises in markets correlates with market outcomes. The findings show that relative to private firms, Romanian state-owned enterprises, particularly those that are majority owned, directly owned, and local ones, employ more people, pay higher wages, but are less productive. In addition, Romanian state-owned enterprises cushioned the job and wage losses associated with the COVID-19 pandemic better than private firms, especially in competitive sectors. Finally, there is evidence that the presence of state-owned enterprises may limit private firm entry and allocative efficiency.
| Main Authors: | , , |
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| Format: | Working Paper biblioteca |
| Language: | English English |
| Published: |
World Bank, Washington, DC
2023-12-21
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| Subjects: | STATE-OWNED ENTERPRISES, COMPETITION, FIRM PERFORMANCE, MARKET STRUCTURE, SUBSIDIES, COVID-19 IMPACTS, PRODUCTIVITY OF STATE-OWNED ENTERPRISES, |
| Online Access: | http://documents.worldbank.org/curated/en/099512412182368915/IDU0e1b2d58d06b57042190830e0c9fa9740d811 https://openknowledge.worldbank.org/handle/10986/40789 |
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| Summary: | This paper assesses the performance
of Romanian state-owned enterprises with various degrees of
ownership (minority owned with 10 to 24.9 percent stakes,
minority owned with 25 to 49.9 percent stakes, and majority
owned with at least 50 percent ownership stakes) and control
levels (central versus local state-owned enterprises and
directly versus indirectly owned state-owned enterprises)
relative to privately owned enterprises. The paper uses the
Romanian firm-level data from the Ministry of Finance
covering enterprises of all sizes from 2011 to 2020,
combined with the new World Bank Businesses of the State
dataset, which tracks ownership of state business entities
with at least 10 percent stake in Romania. The paper
analyzes whether various degrees of state ownership and
levels of control matter for state-owned enterprises’
performance. The paper also assesses whether Romanian
state-owned enterprises were able to act as stabilizers
during the early period of the COVID-19 pandemic, and how
the presence of state-owned enterprises in markets
correlates with market outcomes. The findings show that
relative to private firms, Romanian state-owned enterprises,
particularly those that are majority owned, directly owned,
and local ones, employ more people, pay higher wages, but
are less productive. In addition, Romanian state-owned
enterprises cushioned the job and wage losses associated
with the COVID-19 pandemic better than private firms,
especially in competitive sectors. Finally, there is
evidence that the presence of state-owned enterprises may
limit private firm entry and allocative efficiency. |
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