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Title: Financial and economic consequences of political interference within state-owned enterprises
Author: Kuzman, Tanja
ISNI:       0000 0004 7428 1984
Awarding Body: University of Sheffield
Current Institution: University of Sheffield
Date of Award: 2018
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Conflicting objectives and political interference are recognized as the main reasons for SOEs' inability to exhibit performance levels that are comparable to those of their private counterparts. Political interference within SOEs is a side effect of politicians' objectives to maintain the power and enjoy the associated perquisites. This thesis explores the relationship between three distinct political interference mechanisms and SOE performance/behaviour in six countries of the former Socialist Federal Republic of Yugoslavia (SFRY). We use hand-collected dataset with board membership and financial information about 200 SOEs over the period 2010-2014. Fixed effects and instrumental variable estimators are used in our analysis. Our findings imply that board member changes for SOEs, unlike for private enterprises, are politically motivated rather than performance induced. The politically motivated board member changes negatively influence SOEs' profitability and productivity levels. Performance of SOEs governed by independent government body is not influenced by politically induced board member changes. Aside from initiating board member changes in election years, we find that politicians engage in election-related manipulation of SOEs' corporate decisions. The increase of SOEs' employment and indebtedness is observed in preelection and election years, while upsurge in investments happens in election and postelection years. In election periods, SOEs with politically dominated boards and those governed by central governments suffer from greater increase in the number of employees. Furthermore, we reveal that influence over board structure is another political interference mechanism. The presence of academics on SOE boards is positively associated with performance of SOEs, while government representatives have negative association with operating performance. In addition, these associations become more profound when the intertwined effect of board members' professional backgrounds and political connections is considered. We also find positive relationship between private sector representatives and operational performance of SOEs with minority private ownership.
Supervisor: Talavera, Oleksandr ; Atkins, Jill F. ; Ghafran, Chaudhry M. ; Bellos, Sotirios K. Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available