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Modern Public Enterprises: Organisational Innovation and Productivity

Discussion Papers 1713, 40 S.

Caroline Stiel


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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.

Caroline Stiel

Research Associate in the Firms and Markets Department

Topics: Firms

JEL-Classification: L32;D24;L24;L97
Keywords: State Ownership, Productivity, Firm Organisation, Structural Production Function
Frei zugängliche Version: (econstor)