Ownership versus Environment: Why are Public Sector Firms Inefficient?

In this paper we disentangle the sources of public sector inefficiency using 1982-1995 panel data on manufacturing firms in Indonesia. We consider two leading hypotheses: (1) public sector enterprises are inefficient due to monitoring problems and (2) public sector enterprises are inefficient because of the environment in which they operate, as measured by the soft budget constraint. The two models are nested in a production function framework and the empirical results provide support for the second hypothesis. Public sector enterprises are inefficient because of their access to soft loans; public sector ownership has no independent impact on productivity growth. The finding that ownership per se does not matter, but environment does, holds when we control for fixed effects and when we allow for the endogeneity of government loans. Interestingly, private sector firms with access to government loans did not perform more poorly than other private sector enterprises. Another dimension of the environment, i.e. import penetration, also matters; public sector enterprises that have been shielded from import competition are inferior performers.

Ownership versus environment : disentangling the sources of public sector inefficiency

The authors compare the performance of public and private sector manufacturing firms in Indonesia for 1981-95. They analyze whether public sector inefficiency is due primarily to agency-type problems ("ownership") or to the business environment in which public enterprises operate, as measured by soft budget constraints or barriers to competition. They nest the two alternatives in a production function framework. The results, obtained from fixed-effects specifications, provide support for both models. The business environment matters. Only public enterprises that received loans from state banks or those shielded from import competition performed worse than private enterprises. Ownership matters. For a given level of import competition or soft loans, public enterprises perform worse than their counterparts in the private sector. Eliminating soft loans to Indonesia's public enterprises would raise total factor productivity by 6 percentage points; the same result could be achieved by increasing import penetration by 15 percentage points. The authors show that these findings are not due to selection effects for either privatization or the receipt of soft loans.Labor Policies,Banks&Banking Reform,Municipal Financial Management,Environmental Economics&Policies,Economic Theory&Research,Banks&Banking Reform,Municipal Financial Management,Environmental Economics&Policies,Economic Theory&Research,Public Sector Economics&Finance

1.6 GHz VLBI Observations of SN 1979C: almost-free expansion

We report on 1.6 GHz Very-Long-Baseline-Interferometry (VLBI) observations of supernova SN 1979C made on 18 November 2002. We derive a model-dependent supernova size. We also present a reanalysis of VLBI observations made by us on June 1999 and by other authors on February 2005. We conclude that, contrary to our earlier claim of strong deceleration in the expansion, SN 1979C has been undergoing almost-free expansion ($m = 0.91\pm0.09$; $R \propto t^m$) for over 25 years.Comment: 4 pages, 4 figures; submitted to A&A on 14 May 2009. Accepted on 7 Jul 200

Radio emission of SN1993J: the complete picture. I. Re-analysis of all the available VLBI data

We have performed a complete re-calibration and re-analysis of all the available VLBI observations of supernova SN1993J, following an homogeneous and well-defined methodology. Observations of SN1993J at 69 epochs, spanning 13 years, were performed by two teams, which used different strategies and analysis tools. The results obtained by each group are similar, but their conclusions on the supernova expansion and the shape and evolution of the emitting region differ significantly. From our analysis of the combined set of observations, we have obtained an expansion curve with unprecedented time resolution and coverage. We find that the data from both teams are compatible when analyzed with the same methodology. One expansion index ($m_3 = 0.87 \pm 0.02$) is enough to model the expansion observed at 1.7\,GHz, while two expansion indices ($m_1 = 0.933\pm0.010$ and $m_2 = 0.796\pm0.005$), separated by a break time, $t_{br} = 390\pm30$ days, are needed to model the data, at frequencies higher than 1.7\,GHz, up to day 4000 after explosion. We thus confirm the wavelength dependence of the size of the emitting region reported by one of the groups. We also find that all sizes measured at epochs later than day 4000 after explosion are systematically smaller than our model predictions. We estimate the fractional shell width ($0.31 \pm 0.02$, average of all epochs and frequencies) and the level of opacity to the radio emission by the ejecta. We find evidence of a spectral-index radial gradient in the supernova shell, which is indicative of a frequency-dependent ejecta opacity. Finally, we study the distribution and evolution of the azimuthal anisotropies (hot spots) found around the radio shell during the expansion. These anisotropies have intensities of $\sim 20$% of the mean flux density of the shell, and appear to systematically evolve during the expansion.Comment: 13 pages, 9 figures, accepted for publication in A&

Excitations of anisotropic spin-1 chains with matrix product ground state

We investigate a large class of antiferromagnetic spin-1 chains with nearest neighbour interaction and exactly known matrix product ground state. The spectrum of low-lying excitations is calculated numerically by DMRG and exact diagonalisation. Spin liquid behaviour with an excitation gap is observed meeting the Haldane scenario. Further, we compare properties of the anisotropic model with the well-known isotropic AKLT model and use the analytical single mode approximation to obtain a quantitative understanding of the excitation gap. The low-lying excited states can be interpreted in terms of a magnon-like elementary excitation.Comment: 9 pages, 6 figures, accepted for publication in Eur. Phys. J. B, uses svjour.cl

Ownership Versus Environment: Disentangling the Sources of Public-Sector Inefficiency

An unanswered question in the debate on public-sector inefficiency is whether reforms other than government divestiture can effectively substitute for privatization. Using a 1981–1995 panel data set of all public and private manufacturing establishments in Indonesia, we analyze whether public-sector inefficiency is primarily due to agency-type problems or to the environment in which public-sector enterprises (PSEs) operate, as measured by the soft budget constraint and the degree of internal and external competition. The results, obtained from fixed-effects specifications, provide support for both models. Ownership matters because, for a given level of government financing or competition, PSEs perform worse than their private-sector counterparts. The environment matters because only PSEs which received government financing or those shielded from import competition or foreign ownership performed worse than private enterprises. The results suggest that the efficiency of PSEs can be increased through privatization, through manipulation of the environment, or through a combination of both approaches