The Return of Public Enterprise

12 Pages Posted: 13 Feb 2015 Last revised: 19 Feb 2015

See all articles by Massimo Florio

Massimo Florio

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM)

Date Written: January 29, 2014


Public enterprises never disappeared in spite of several privatization waves in the last three decades. This paper offers some trends and possible rationales for their resilience. In a sample of the Forbes 2000 top corporations, as reviewed by OECD economists (Kowalski et al. 2013), we show that the around ten per cent of state-owned enterprises perform better in financial terms than their private counterparts. The Great Recession has also shown that governments had to take over failing major private enterprises, including particularly banks. In several countries, particularly in Western Europe, there is municipalization of electricity and water distribution. In the EU/15, there is also evidence that in electricity and gas, government owned incumbents offer fairer prices to households than private competitors. Recent research on mergers and acquisitions confirms that in the last ten years there has been an increase of publicization relative to privatization, including through trans-border deals.

Keywords: Public enterprise, privatization.

JEL Classification: H44, L32, L33

Suggested Citation

Florio, Massimo, The Return of Public Enterprise (January 29, 2014). Available at SSRN: or

Massimo Florio (Contact Author)

University of Milan - Department of Economics, Management and Quantitative Methods (DEMM) ( email )

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