Publication:
The Financial Premium and Real Cost of Bureaucrats in Businesses

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dc.contributor.authorCusolito, Ana P.
dc.contributor.authorFattal Jaef, Roberto N.
dc.contributor.authorPatiño Peña, Fausto
dc.contributor.authorSingh, Akshat V.
dc.date.accessioned2024-09-26T20:27:48Z
dc.date.available2024-09-26T20:27:48Z
dc.date.issued2024-09-26
dc.description.abstractThis paper characterizes finance allocation distortions in capital markets across state-owned and private-owned enterprises. It does so by implementing Whited and Zhao’s (2021) methodology to infer idiosyncratic financial distortions on a novel firm-level database containing information on the ownership structure of firms operating in 24 European countries during 2010–16. The analysis finds that firms with public authorities as direct shareholders (state-owned enterprises) have subsidized access to debt and equity, compared to their private counterparts. The paper then quantifies the macroeconomic effects of removing state-owned firms and reallocating their financial resources toward the private sector. The findings show that although state-owned enterprises are on average subsidized relative to private firms, removal of state-owned enterprises from the market may lead to aggregate productivity losses of up to 40 percent due to their superior technical efficiency in some sectors. Targeted reforms that only shut down poorly performing state-owned enterprises lead to aggregate total factor productivity gains in every country, reaching up to 15 percent. Reforms that in addition remove distortions before reallocating the released resources toward more productive firms increase productivity up to 83.7 percent.en
dc.identifierhttp://documents.worldbank.org/curated/en/099230409252414087/IDU172ace1fe1ee1a14ac619a86120a270c8e532
dc.identifier.doi10.1596/1813-9450-10929
dc.identifier.urihttps://hdl.handle.net/10986/42205
dc.languageEnglish
dc.language.isoen_US
dc.publisherWashington, DC: World Bank
dc.relation.ispartofseriesPolicy Research Working Paper; 10929
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttps://creativecommons.org/licenses/by/3.0/igo/
dc.subjectSOES
dc.subjectSTATE-OWNERSHIP DISTORTIONS
dc.subjectPRODUCTIVITY
dc.subjectFINANCE MISALLOCATION
dc.subjectDECENT WORK AND ECONOMIC GROWTH
dc.subjectSDG 8
dc.titleThe Financial Premium and Real Cost of Bureaucrats in Businessesen
dc.typeWorking Paper
dspace.entity.typePublication
okr.crossref.titleThe Financial Premium and Real Cost of Bureaucrats in Businesses
okr.date.disclosure2024-09-26
okr.date.lastmodified2024-09-25T00:00:00Zen
okr.doctypePolicy Research Working Paper
okr.doctypePublications & Research
okr.docurlhttp://documents.worldbank.org/curated/en/099230409252414087/IDU172ace1fe1ee1a14ac619a86120a270c8e532
okr.guid099230409252414087
okr.identifier.docmidIDU-72ace1fe-ee1a-4ac6-9a86-20a270c8e532
okr.identifier.doi10.1596/1813-9450-10929
okr.identifier.doihttps://doi.org/10.1596/1813-9450-10929
okr.identifier.externaldocumentum34395038
okr.identifier.internaldocumentum34395038
okr.identifier.reportWPS10929
okr.import.id5365
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/099230409252414087/pdf/IDU172ace1fe1ee1a14ac619a86120a270c8e532.pdfen
okr.region.geographicalWorld
okr.sectorSub-National Government,Other Industry, Trade and Services
okr.themePublic Private Partnerships,Mitigation,Municipal Institution Building,Investment and Business Climate,Data Development and Capacity Building,State-owned Enterprise Reform and Privatization,Environment and Natural Resource Management,Private Sector Development,Regulation and Competition Policy,Public Sector Management,Climate change,Business Enabling Environment,Data production, accessibility and use,Public Administration
okr.topicGovernance::Governance and the Financial Sector
okr.topicFinance and Financial Sector Development::Finance and Development
okr.topicPrivate Sector Development::Small and Medium Size Enterprises
okr.unitProsperity-FCI-TIC-Mkts
okr.unitComp&Tec (ETIMT)
okr.unitEFI-LCR-MTI-MacroFiscal (ELCMU)
okr.unitDECRG: Macroeconomics & Growth (DECMG)
okr.unitOffice of the Chief Economist (ECACE)
relation.isAuthorOfPublication2151d2ff-4e3c-5181-b0a1-bf5a52b587ec
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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