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

The Panopticon and the performance arena: HCI reaches within

The impact of new technologies is hard to predict. We suggest the value of theories of performativity in understanding dynamics around the convergence of biomedical and information technology. Drawing on the ideas of Butler and Foucault, we discuss a new, internal, context for HCI and raise potentially disturbing issues with monitoring health. We argue that by adopting explicitly social framings we can see beyond the idea of medical interventions to tools for wellbeing and recognize more of the implications of looking within

Job Mobility and Earnings Growth

This paper uses detailed data on the salary histories of individuals to show how an individual's observed earnings growth can be decomposed into growth occurring on the job and growth occurring between jobs. it is shown that the relative contributions of these two components to overall earnings growth differ across race and education groups. Further, as predicted by the specific training hypothesis, the more mobile individuals are found to have smaller on-the-job earnings gains in absolute terms than the less mobile.

Location Decisions of the New Immigrants to the United States

This paper estimates a multinomial logit model of the location decisions of new immigrants to the United States. Data from the 5- percent Public Use Samples of the 1970 and 1980 Censuses of Population are used to study the geographic distribution of immigrants who arrived after 1965. The major findings are as follows: (1) In choosing both initial and subsequent locations, immigrants are considerably more geographically concentrated than native Americans who move to a new city. (2) All of the immigrant groups prefer to live in cities where their countrymen are already located, but this relationship is much weaker for the more educated immigrants. (3) There is ambiguous evidence on the question of whether immigrants learn about economic opportunities as they spend time in this country. On the one hand, with the exception of the Mexicans, distance from the home country has a much weaker negative impact on location choice as time in the U.S. elapses. On the other hand, the expected wage variable, which should have a larger positive effect over time, only did so for the Asians, and to some extent, the Central and South Americans (excluding Mexicans and Cubans). (4) Within each ethnic group, there are significant differences in the location choice behavior of the 1965-69 and 1975-79 immigrant cohorts. The results are consistent with an increase over time in the quality of Asian immigrants, and a decrease in the quality of Mexican, Cuban and European immigrants.

Formal Employee Training Programs and Their Impact on Labor Produc- tivity: Evidence from a Human Resources Survey

Although economic models of training decisions are framed in terms of a company's calculation of the costs and benefits of such training, empirical work has never been able to test this model directly on company behavior. This paper utilizes a unique database to analyze the determinants of the variation in formal training across businesses and the impact of such training on labor productivity. Major findings are that large businesses, those introducing new technology end those who rely on internal promotions to fill vacancies are more likely to have formal training programs. Formal training is found to have a positive effect on labor productivity.

The Biodegradation of Organic Substrates Under Arctic and Subarctic Conditions

The objective of this research was to obtain data on the metabolic reaction rates of the microorganisms indigenous to the cold environments of the arctic and sub-arctic in order to evaluate the natural abilities of the freshwater streams and lakes of Alaska to assimilate the wastes discharged into them. Microorganisms capable of growth even at subzero temperatures have long been known; however, most have consistently fared better at higher temperatures, usually above 20° C. Much of the work done with the biological oxidation of wastes at low temperatures has been with organisms of this type : mesophilic organisms which are able to survive at low temperatures but which are metabolically much more active in the temperature range from 20 to 45° C. Such organisms might be labeled "cold-tolerant," but they are probably biochemically quite different from the truly "cold-loving," or psychrophilic, microorganisms which are able not only to survive but also to thrive at temperatures below 20° C and which, in fact, find temperatures much higher than 25° C intolerable.This work upon which this report (Proj. A-014-ALAS) is based was supported by funds provided by the United States Department of the Interior, Office of Water Resources Research, as authorized under the Water Resources Act of 1964, as amended

The Sarbanes-Oxley Act, Security Analyst Monitoring Activity, and Firm Value

In this study we examine the complementary monitoring activity that takes place via the Sarbanes-Oxley Act (SOX) and its effect on security analyst monitoring activity and firm value of large and small public firms. Our findings indicate that security analyst monitoring activity has decreased post-SOX while firm value has increased post-SOX for both large and small firms. We also find that the increase in firm value is more pronounced for the group of small firms. Given these results, we surmise that the complementary monitoring activity provided by SOX is effective enough to have a positive impact on firm value