Financial pressure and the behaviour of public enterprises under soft and hard budget constraints: evidence from Italian panel data

• 成果类型: Article
• 署名作者: Bertero, E; Rondi, L
• 署名单位: Consiglio Nazionale delle Ricerche (CNR); University of London; London School Economics & Political Science
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/S0047-2727(99)00057-2
• 发表日期: 2000
• 页码: 73-98
• 关键词: public enterprises; soft/hard budget constraint; financial discipline; panel data; Italian firms

摘要

This paper studies the effect of the hardening of the budget constraint on the behaviour of public enterprises. Drawing from finance theory, we provide empirical evidence of a change in behaviour of pubic enterprises between soft and hard budget constraint regimes by investigating the financial discipline enforced by debt across the two regimes. Using a panel of Italian state-owned manufacturing firms, we undertake a natural experiment exploiting a shift of budget regimes in the late 1980s. Consistent with the theoretical predictions, the results show that state firms do respond to financial pressure by increasing productivity and reducing employment in a hard budget constraint environment. (C) 2000 Elsevier Science S.A. All rights reserved.