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Book part
Publication date: 5 February 2016

Irwin Feller

Since at least the 1970s, the American research university system has experienced episodic periods of austerity, frequently accompanied by expressions of concern about the…

Abstract

Since at least the 1970s, the American research university system has experienced episodic periods of austerity, frequently accompanied by expressions of concern about the threats that these conditions pose to U.S. scientific and technological leadership. In general, austerity has been tied to fluctuations in Federal Government funding of academic research and macroeconomic fluctuations that have shrunk state government budget revenues. Even amidst these episodes, the system has continued to expand and decentralize. The issue at present is whether this historic resiliency, of being a marvelous invalid, will overcome adverse contemporary trends in Federal and state government funding, as well as political trends that eat away at the societal bonds between universities and their broader publics. The paper juxtaposes examinations of the organizational and political influences that have given rise to the American research university system, trends in research revenues and research costs, and contemporary efforts by universities to balance the two. It singles out the secular decline in state government’s support of public universities as the principal reason why this period of contraction is different from those of the past. Rather though then these trends portending a market shakeout, as some at times have predicted, the projection here is that the academic research system will continue to be characterized by excess capacity and recurrent downward pressures on research costs. Because the adverse impacts are concentrated in the public university sector, they may also spill over into political threats to the current system of awarding academic research grants primarily via competitive, merit review arrangements.

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The University Under Pressure
Type: Book
ISBN: 978-1-78560-831-5

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Book part
Publication date: 20 April 2021

Sharmila Pixy Ferris and Kathleen Waldron

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Higher Education Leadership
Type: Book
ISBN: 978-1-83982-230-8

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Article
Publication date: 12 October 2020

Priya Mandiratta and G.S. Bhalla

The purpose of this study is to represent an attempt to empirically capture the impact of disinvestment on the financial and operating performance of 26 Bombay Stock…

Abstract

Purpose

The purpose of this study is to represent an attempt to empirically capture the impact of disinvestment on the financial and operating performance of 26 Bombay Stock Exchange (BSE) listed central public sector enterprises (CPSEs) in India which got divested through stock market mechanism during the time period of 2000–2014.

Design/methodology/approach

Through ratio analysis different ratios such as return on assets, return on equity, net income efficiency, debt equity, dividend payout and employment levels have been computed. Pre- and post disinvestment performance of these firms is examined through Wilcoxon signed-rank test. The present research endeavors to examine the impact of disinvestment through random effect panel data models in order to control the effect of other firm specific variables.

Findings

The overall results of the study indicate statistically significant fall in profitability ratios. The empirical results have not witnessed positive effect of disinvestment on the profitability of the CPSEs; rather, this effect has found to be negative. The possible reasons behind these negative results could be poor pre disinvestment financial health of CPSEs, negative rate of return on capital employed by PSEs and inefficiency which need to be tested empirically by future researchers.

Originality/value

The fact that government-owned firms are typically less proficient or at least less gainful than private-owned firms is widely hypothesized. Therefore, the disinvestment policy aims at dropping the participation of the public sector in the economic actions of the country in order to support the private sector. The present study is a first of its kind to study the impact of disinvestment on the profitability of the firms, which got divested through stock market mechanism since the year 2000 by applying both univariate and multivariate analysis.

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Journal of Economic and Administrative Sciences, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1026-4116

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Article
Publication date: 5 March 2018

Ajay Chhibber and Swati Gupta

While national public policies such as performance contracts and disinvestment affect the dynamics of large- and medium-scale state-owned enterprises in emerging market…

Abstract

Purpose

While national public policies such as performance contracts and disinvestment affect the dynamics of large- and medium-scale state-owned enterprises in emerging market economies, the purpose of this paper is to analyze the performance of India’s public sector undertakings (PSUs) and suggest options to improve their outcomes.

Design/methodology/approach

Using firm-level data on India’s 235 PSUs with total assets of around $500 billion over the past two and half decades (1990-2015), the study empirically tests the effect of performance contracts, measured by memorandum of understanding (MOU) and disinvestment, measured by private equity share, on PSUs performance indicator such as return on capital (ROC). Data were collected from the Public Enterprises Survey Reports released by the Department of Public Enterprises under India’s Ministry of Heavy Industries and Public Enterprises, Department of Disinvestment, Bombay Stock Exchange and Capitaline database. By controlling firm-, industry- and macro-level factors in regression models, the results were presented in several aspects like service sector, non-service sector and individual and joint effects.

Findings

Empirical estimations indicate that performance contracts such as MOUs have had a positive impact on PSU performance by increasing their ROC by 8-9 percent. This result holds more strongly for the non-service sector (manufacturing, mining) but less so for service sector firms. In the case of service sector firms, partial privatization (share sales) has a significant impact on performance, making them ideal candidates for more aggressive disinvestment. Larger PSUs (Maharatnas) appear to perform better than smaller PSUs and even better than private firms of similar size. Smaller PSUs (Navratnas and Miniratnas) perform worse than private companies and should be good candidates for strategic disinvestment (privatization). PSUs that do not have Ratna status – and are loss makers – should be disposed of their asset value.

Practical implications

The study recommends that India should change the public sector balance sheet by raising capital through strategic disinvestment (privatization), disinvestment and liquidation of PSUs and re-investing it, in public infrastructure through the National Infrastructure Investment Fund and not into the budget as a revenue-raising measure. It should also transform Maharatnas into world class companies with greater commercialization.

Originality/value

The paper makes significant contributions to the academic literature on the changing dynamics of state-owned enterprises in emerging economies by examining the effect of performance contracts and disinvestment on India’s PSUs performance. It is one of unique longitudinal-empirical studies on India’s PSU performance in several dimensions.

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International Journal of Public Sector Management, vol. 31 no. 2
Type: Research Article
ISSN: 0951-3558

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Expert briefing
Publication date: 21 August 2017

Indian disinvestment in state-owned enterprises.

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DOI: 10.1108/OXAN-DB223910

ISSN: 2633-304X

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Article
Publication date: 21 October 2020

Abhijit Phukon and Divya Verma Gakhar

This paper aims to attempt to empirically investigate the impact of privatization on the performance of central public sector enterprises in India. Further attempt is made…

Abstract

Purpose

This paper aims to attempt to empirically investigate the impact of privatization on the performance of central public sector enterprises in India. Further attempt is made to explore whether privatization is a necessary or sufficient condition for improvement of performance of central public sector enterprises.

Design/methodology/approach

The scope of the study is limited to financial and operating performance analysis of 206 central public sector enterprises in India. Multiple regression analysis has been used to determine the magnitude and direction of relationship between dependent and independent variables and identify variables other than privatization which affects performance.

Findings

The study found that financial and operational performance of firms has improved significantly due to privatization. Further, firm-specific factors and other parallel reforms adopted by enterprises have significantly influenced their performance. The established regression model is highly significant with F-ratio of 31.825 at 99% significance level. The degree of explanation of the model is robust with adjusted R2 at 0.956 implying that only 4.40% of explanation in the dependent variable cannot be explained by designated independent/explanatory variables.

Originality/value

The study would be useful to public policymakers to reach to a policy view on whether further disinvestment/privatization of central public sector enterprises need to be continued, and if so, then to what extent and direction.

Details

PSU Research Review, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2399-1747

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Book part
Publication date: 12 August 2014

Craig Mitton, François Dionne and Diane Schmidt

The purpose of this chapter is to describe a method for priority setting that can be used to identify options for disinvestment, and is also meant to serve as a tool for…

Abstract

Purpose

The purpose of this chapter is to describe a method for priority setting that can be used to identify options for disinvestment, and is also meant to serve as a tool for re-allocation of resources to achieve better outcomes with a given pot of resources.

Approach

This chapter draws on findings from the application of a priority setting and resource allocation framework known as Program Budgeting and Marginal Analysis (PBMA). Case studies are used to illustrate key points around implementation including factors for success and guidelines for improving priority setting in practice.

Findings

PBMA has been applied in over 150 settings over the last 30 years. Purposes varied from focusing strictly on disinvestment to examining opportunities for re-allocation. Many organizations report continued use of the framework and decision makers typically express a desire to not revert to historical allocation or political negotiation in deciding on the funding for programs.

Practical implications

Practical implications of this body of work on priority setting abound in that there are significant opportunities to improve resource allocation practice including better engagement of staff, clinicians and public members, greater use of evidence in decision making and improving process transparency.

Social implications

As healthcare resources are limited, particularly in predominantly publicly funded health systems, prudent use of resources is critical. Actually applying the appropriate tools to ensure that funding aligns with organizational and system objectives is paramount.

Originality/value

Although there is a large body of literature on priority setting particularly in countries like the United Kingdom and Canada, this chapter serves to highlight key messages specifically in the context of fiscal constraint and in relation to the concept of disinvestment or service reduction.

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Reconfiguring the Ecosystem for Sustainable Healthcare
Type: Book
ISBN: 978-1-78441-035-3

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Book part
Publication date: 31 July 2020

Naveed Elahi and Pervez Ghauri

Abstract

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Multinational Enterprises and Terrorism
Type: Book
ISBN: 978-1-83867-585-1

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Article
Publication date: 28 October 2013

Tom Daniels, Iestyn Williams, Suzanne Robinson and Katie Spence

The aims of this paper are to explore the experiences of budget holders within the English National Health Service (NHS), in their attempts to implement programmes of…

Abstract

Purpose

The aims of this paper are to explore the experiences of budget holders within the English National Health Service (NHS), in their attempts to implement programmes of disinvestment, and to consider factors which influence the success (or otherwise) of this activity.

Design/methodology/approach

Between 24 January and 15 March 2011 semi-structured, telephone interviews were conducted with representatives of 12 Primary Care Trusts in England. Interviews focussed on: understanding of the term “disinvestment”; current activities, and perceived determinants of successful disinvestment decision making and implementation. Data were organised into themes according to standard qualitative data coding practices.

Findings

Findings indicate that experiences of disinvestment are varied and that organisations are currently adopting a range of approaches. There are a number of apparently influential determinants of disinvestment which relate to both health system features and organisational characteristics. According to the experiences of the interviewees, many of the easier disinvestment options have now been taken and more ambitious plans, which require wider engagement and more thorough project management, will be required in the future.

Research limitations/implications

Findings from the research suggest that issues around understanding and usage of disinvestment terminology should be addressed and that a more in-depth and ethnographic research agenda will be of most value in moving forward both the theory and practice of disinvestment.

Originality/value

This research suggests that, in the English NHS at least, there is a disjuncture between common usage of the term “disinvestment” and the way that it has previously been understood by the wider research community. In addition to this, the research also highlights a broader range of potential determinants of disinvestment than are considered in the extant literature.

Details

Journal of Health Organization and Management, vol. 27 no. 6
Type: Research Article
ISSN: 1477-7266

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Case study
Publication date: 20 October 2010

Samir K. Barua and Sobhesh Kumar Agarwalla

Disinvestment of government shareholding in Public Sector Undertakings, through Public Offers, is a common occurrence in many economies. This case describes such a process…

Abstract

Disinvestment of government shareholding in Public Sector Undertakings, through Public Offers, is a common occurrence in many economies. This case describes such a process of disinvestment of the government of India's stake in a large power utility, National Thermal Power Corporation (NTPC) in India. In addition to process details, the case contains information and data that make it possible to rigorously analyze the response of market participants and the resulting changes in the prices of shares of NTPC before, during and after the public offer.

Details

Indian Institute of Management Ahmedabad, vol. no.
Type: Case Study
ISSN: 2633-3260
Published by: Indian Institute of Management Ahmedabad

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