THE RELATIONSHIP BETWEEN GOVERNMENT DEBT AND STATE-OWNED ENTERPRISES: AN EMPIRICAL ANALYSIS OF ESKOM

Yıl 2020, , 119 - 134, 30.06.2020

Lerato Nkosi

https://doi.org/10.34109/ijefs.202012108

Cited By: 1

Öz

This study empirically investigates the relationship between government debt and Eskom debt using Eskom’s financial statements and government debt data from 1985 – 2017. The paper uses a Vector Autoregression (VAR) model. Variance decomposition analysis shows large forecast error variances amongst all variables. The study finds that Eskom’s increase in revenue is largely attributed to tariff increases and access to various funds rather than increases in sales. The study also shows that Eskom will continue to be illiquid and insolvent, thus fiscal consolidation or privatization are suggested as fiscal strategies.

Anahtar Kelimeler

State Owned Enterprises, Eskom, government debt, VAR

Kaynakça

• Barro.R.J & Grilli.V (1994), European Macroeconomics, MacMillan
• Barro.R.J. (1979). On the Determination of Public Debt, Journal of Political Economy, 87(5), 940-971
• Bräuninger. M (2005), The Budget Deficit, Public Debt, and Endogenous Growth, The Journal of Public Economic Theory,7(5), 827-840
• Buchanan J.M. (2008) Public Debt. In: Palgrave Macmillan (eds) The New Palgrave Dictionary of Economics. Palgrave Macmillan, London
• Creamer.T (2011) Eskom's R12bn global bond debut dubbed 'competitive'. Mining Weekly, 20 January, 1-3, https://www.engineeringnews.co.za/print-version/eskoms-r12bn-global-bond-debut-debbed-compeitive-2011-01-20, accessed on the 1/03/ 2018
• Cull.R and Xu.L.C (2002), Who gets credit? The behavior of bureaucrats and state banks in allocating credit to Chinese state-owned enterprises, The World Bank
• Development Bank of South Africa (2012), The State of South Africa’s Economic Infrastructure: Opportunities and challenges, Department of Monitoring Performance and Evaluation
• Dickey.D.A and Fuller.W.A (1979), ‘Distribution of the Estimators for Autoregressive Time Series With a Unit Root’, Journal of the American Statistical Association, 74(366), 427-431. Dewenter.K.L and Malatesta.P.H (2001), State-Owned and Privately Owned Firms: An Empirical Analysis of Profitability, Leverage,and Labor Intensity, The American Economic Review, 91(1), 320-334.
• Eberhard, A (2004), The Political Economy of Power Sector Reform in South Africa, Cambridge University Press
• Gigler.A and McMillan.L (2018), The impact of rising electricity tariffs on large firms in South Africa, United Nations University World Institute for Development Research, WIDER Working Paper 2018/32
• Grains Research and Development Corporation (GRDC) (2013), Key Financial Ratios Fact Sheet, Hudson Facilitation
• Gujarati, D.N. (2004), Basic Econometrics, 4th Edition, McGraw-Hill Companies
• Harris R.I.D (1995), Using Cointegration Analysis in Economic Modelling, 1st Edition, Prentice Hall
• Hyman. D (2011), Public Finance: A Contemporary Application of Theory to Policy, 10th Edition, South West Cengage Learning
• Julies, A. (2018). State Owned Companies Governance: Investment and Financing,GTAC Winter School, South African Reserve Bank.
• Kessides.J.N (2004), Reforming Infrastructure : Privatization, Regulation, and Competition, A World Bank Policy Research Report, World Bank and Oxford University Press
• Keynes. J. M (1936), The General Theory of Employment, Interest, and Money, Palgrave London McMillan
• Kumbirai.M and Webb. R (2010), A Financial Ratio Analysis of Commercial Bank Performance in South Africa, African Review of Economics and Finance, 2(1), 30 - 53
• Lipczynski, J., Wilson, J., Goddard, J. (2003). Industrial organization. Harlow, England: Prentice Hall
• Lütkepohl, H (2006) "Structural vector autoregressive analysis for cointegrated variables," AStA Advances in Statistical Analysis, Springer; German Statistical Society, 90(1), 75-88
• Lutkepohl.H and Poskitt.D.S (1991), Estimating Orthogonal Impulse Responses Via Vector Autoregressive Models, Cambridge University Press
• National Treasury (2018), Budget Review 2018, Republic of South Africa, http://www.treasury.gov.za/documents/national%20budget/2018/review/FullBR.pdf, accessed on 1/03/2018
• Ncube.M and Brixiova.Z (2015), Public Debt Sustainability in Africa: Building Resilience and Challenges Ahead, African Development Bank Group, Working Paper 227
• Neck. R and Getzner M (2001) Politico-Economic Determinants of Public Debt Growth: A Case Study for Austria, Public Choice, 109(3-4), 243-268
• Ngwenya, S. and Khumalo, M. (2012) CEO compensation and performance Of State-Owned Enterprises in South Africa, Corporate Ownership & Control, 10(1), 97-109
• Phillips, P. and Perron , T(1988),Testing for unit root in time series regression, Biometrica,75(2), 335-346
• Stiglitz, J.E. (2015). “The Politics of Economic Stupidity”, Project Syndicate
• Svaljek.S (1997), Public Debt Boundaries: A Review of Theories and Methods of the Assessment of Public Debt Sustainability, Economic Trends and Economic Policy, 1(61), 34-64
• Tanzi.V (2016), Pleasant Dreams or Nightmares in Public Debt Scenarios, Ifo Institute – Leibniz Institute for Economic Research at the University of Munich, 17, Special Issue,40-43 Tian.L & Estrin.S (2007), Debt financing, soft budget constraints, and government ownership, Economics of Transition, 15(3), 461-481
• Walton, P. and Aerts, A. (2009). Global Financial Accounting and Reporting: Principles and Analysis. 2nd Edition, Andover: Cengage Learning.
• World Bank (2014), Corporate Governance of State-Owned Enterprises,Washington, World Bank Group.
• Yi-chong, X (2012). The Political Economy of State-Owned Enterprises in China and India, Palgrave Mc Millan