State‐Owned Enterprises, Inequality, and Political Ideology

24 Pages Posted: 11 Oct 2013

See all articles by Veysel Avsar

Veysel Avsar

Texas A&M University Corpus Christi

Cem Karayalcin

Florida International University (FIU)

Mehmet Ali Ulubasoglu

Deakin University - School of Accounting, Economics and Finance

Date Written: November 2013

Abstract

State‐owned enterprises continue to play a considerable role in many economies. In this study we empirically investigate the connections between these enterprises and inequality as mediated through political ideology. Using cross‐country data on the relative size of the state‐owned enterprise sector, we find strong empirical support for an inverted U‐shaped relationship between its size and income inequality. We also find strong evidence that left‐wing (vis‐a‐vis right‐wing) governments are associated with a larger state‐owned enterprise sector in countries with higher inequality. This result is robust to using cross‐sectional vs. panel data, different identification strategies, and various controls.

Suggested Citation

Avsar, Veysel and Karayalcin, Cem and Ulubasoglu, Mehmet Ali, State‐Owned Enterprises, Inequality, and Political Ideology (November 2013). Economics & Politics, Vol. 25, Issue 3, pp. 387-410, 2013, Available at SSRN: https://ssrn.com/abstract=2338791 or http://dx.doi.org/10.1111/ecpo.12017

Veysel Avsar

Texas A&M University Corpus Christi ( email )

6300 OCEAN DRIVE, UNIT 5808
CORPUS CHRISTI, TX 78412
United States

Cem Karayalcin

Florida International University (FIU)

University Park
11200 SW 8th Street
Miami, FL 33199
United States

Mehmet Ali Ulubasoglu

Deakin University - School of Accounting, Economics and Finance ( email )

Burwood, Victoria 3215
Australia
+61 3 9244 6592 (Phone)

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