The effects of government ideology on the performance of state-owned enterprises: The case of Lithuania

摘要

Even though empirical studies show that political institutions affect various economic policies, standard economic models do not evaluate the effects of government ideology on the performance of state firms. I argue that state-owned enterprises (SOEs) are more efficient under center-right governments, while state firms under center-left cabinets show weaker performance. A modified Stackelberg oligopoly competition model that analyzes the proposed connection is developed. I, then, test implications from the model empirically using the case of Lithuania.