State-Owned Enterprises as Countercyclical Instruments : Experimental Evidence from the Infrastructure Sector
This paper examines the effects of a negative macroeconomic shock on the financial performance of state-owned enterprises (SOEs) in infrastructure. It exploits the differential effects of a drastic fall in oil prices (in 2014–15) on SOEs in energy-...
| Main Authors: | , , , , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2022
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/860131647884943680/State-Owned-Enterprises-as-Countercyclical-Instruments-Experimental-Evidence-from-the-Infrastructure-Sector http://hdl.handle.net/10986/37202 |
| Summary: | This paper examines the effects of a
negative macroeconomic shock on the financial performance of
state-owned enterprises (SOEs) in infrastructure. It
exploits the differential effects of a drastic fall in oil
prices (in 2014–15) on SOEs in energy-rich countries
relative to SOEs in non-energy-rich countries, matching
firms based on their fuel expense ratio. The results—based
on a balanced sample using coarsened exact matching and a
differences-in-differences estimation—indicate that fully
owned SOEs (FSOEs) that suffered a negative macroeconomic
shock performed worse than those that did not. FSOEs that
suffered a shock also received large fiscal transfers from
the government to cope with the shock for three years after
the shock. Despite the transfers, they reduced their capital
expenditures as a consequence of the shock. |
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