Thresholds in natural resource rents and state owned enterprise profitability: cross country evidence

Lim, KY ORCID: https://orcid.org/0000-0003-1978-176X and Morris, D ORCID: https://orcid.org/0000-0001-9268-1293, 2022. Thresholds in natural resource rents and state owned enterprise profitability: cross country evidence. Energy Economics, 106: 105779. ISSN 0140-9883

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Abstract

In this paper we contribute to the resource curse literature by examining the association between state owned enterprises (SOE) profitability and natural resource rents. We use data on 91,094 firms across 36 industries in 101 countries to show that although SOEs are inherently less productive compared to privately owned enterprises (POEs), there exists a threshold value of natural resource rents windfall above which SOEs would outperform POEs profitability. This threshold value of natural resource windfall we find to be between 138.6% and 192.3% above the long-term median value of resource rents. We argue that this threshold may exist because of: (i) at the country level, higher level of natural resource rents allocation that is reinvested domestically in the form of SOE capital investments; and (ii) at the industry level, SOEs experience higher scale economies through production linkages to the natural resource sector.

Item Type:	Journal article
Publication Title:	Energy Economics
Creators:	Lim, K.Y. and Morris, D.
Publisher:	Elsevier BV
Date:	February 2022
Volume:	106
ISSN:	0140-9883
Identifiers:	Number Type 10.1016/j.eneco.2021.105779 DOI S0140988321006186 Publisher Item Identifier 1510205 Other
Divisions:	Schools > Nottingham Business School
Record created by:	Linda Sullivan
Date Added:	01 Feb 2022 14:09
Last Modified:	08 Jan 2024 03:00
URI:	https://irep.ntu.ac.uk/id/eprint/45471

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