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Title: The performance of the nationalised industries : a comparative study
Author: Siddiqi, H. M. G. A.
ISNI:       0000 0001 3408 7077
Awarding Body: Manchester Business School
Current Institution: University of Manchester
Date of Award: 1977
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This econometric study aims at comparing the performance of the nationalised enterprises with that of the private enterprises. This is done by selecting those enterprises which bear adequate comparability - the emphasis being on like-with-like comparison. Adequate comparability is ensured by selecting a single industry which consists of two sub-sots of firms - one sub-set owned and managed by the state and the other by the private companies. The U.K. air-transport which has both public and private sectors is selected for empirical investigation. Using the data provided by the U.K. airline industry, this study compares performances on the basis of cost-efficiency. The data are analysed fitting to mathematical models. Multiplicative forms of statistical cost functions are specified, and their parameters are estimated by applying stepwise regression analysis. In the cost-function, the total direct operating cost (DOC) is used as the dependent variable. To a set of five explanatory variables, two dummy variables are introduced to measure the effect on the DOC of nationalisation and technology. The dummy variables are the most important analytical tools. The statistical reliability is evaluated by applying several tests: (1) the level of multi-colinearity is evaluated by Farrar-Glauber test; (2) the Goldfeld-Quandt test is used to measure the degree of heteroscedasticity; and (3) the structural differences between equations are evaluated by applying the Chow test. The relative efficiency comparison is made in terms of (1) total productivity, and (2) partial productivity. Suitable cost- Functions are used to measure the relevant cost-efficiency. In addition, a production function is estimated for two purposes: (a) to examine if the findings derived from the coefficients of the cost function tend to conform to those derived from the relevant production function, and (b) to determine if it is possible to relate the cost-efficiency criterion to some other general criterion, viz. profitability. By analysing the coefficients of the dummy variables, it is concluded that if an increase in DOC of producing one unit of output (seat kilometre available) is taken as a sign of inefficiency, the nationalised airlines are less efficient than the private airlines. The findings of this study demonstrate that nationalised airlines can decrease their level of inefficiency by substituting turbo-jet aircraft- for turbo-prop aircraft, given the existing route-network. By undertaking like-with-like comparison and using sophisticated econometric methods this study has made a contribution to the efforts so far made to evaluate the relative efficiency of the private and public enterprises.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available