Ownership and Growth

27 Pages Posted: 7 Jan 1999

See all articles by Thorvaldur Gylfason

Thorvaldur Gylfason

University of Iceland - Faculty of Economics and Business Administration; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Tryggvi Thor Herbertsson

University of Reykjavik

Gylfi Zoega

University of Iceland; University of London - Birkbeck College; Centre for Economic Policy Research (CEPR)

Date Written: June 1998

Abstract

This paper introduces state-owned enterprises into an endogenous-growth model with an expanding variety of inputs. It shows that, if state firms are less efficient than private firms in organizing labor and also in adopting new technology, the rate of innovation and, hence, also the rate of growth of output will be lower in the long run, ceteris paribus, because the rate of innovation is adversely affected. The model is tested on cross-section data for about 75 industrial and developing countries over the period 1978-92. We find that the size of state-owned sector is inversely related to total factor productivity and economic growth.

JEL Classification: O41, P12

Suggested Citation

Gylfason, Thorvaldur and Herbertsson, Tryggvi Thor and Zoega, Gylfi, Ownership and Growth (June 1998). Available at SSRN: https://ssrn.com/abstract=137208 or http://dx.doi.org/10.2139/ssrn.137208

Thorvaldur Gylfason (Contact Author)

University of Iceland - Faculty of Economics and Business Administration ( email )

IS-101 Reykjavik
Iceland
+354 525 4533/00 (Phone)
+354 552 6806 (Fax)

HOME PAGE: http://www.hi.is/~gylfason/inenglish.htm)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Tryggvi Thor Herbertsson

University of Reykjavik ( email )

Reykjavik
Iceland
+354 8613162 (Phone)

HOME PAGE: http://www.ru.is

Gylfi Zoega

University of Iceland ( email )

IS-101 Reykjavik
Iceland

University of London - Birkbeck College ( email )

Malet Street
London, WC1E 7HX
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

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