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황정윤 ( Joungyoon Hwang ),김회성 ( Heysung Kim ),장용석 ( Yong Suk Jang ) 한국행정학회 2015 韓國行政學報 Vol.49 No.3
While little empirical evidence is available on the overall performance of public enterprises, even less is known about what determines the size of debts, one of the fundamental issues in managing public enterprises. We attempt to shed more light on th important but little-known topic by empirically identifying the factors that contribute to the size of debts of local public enterprises in Korea. Using data 371 local public enterprises from 2010 to 2013, this paper expands the focus of the analyses to evaluate the impacts of several aspects including efficiency, local demand, local politics, and isomorphic tendency. Findings show the debts of local public enterprises increase: 1) as local demand expand, 2) when a leader has a weak base of political support or faces heavy financial distress, 3) as other public enterprises in functionally or role-equivalent positions increase their debts. Internal efficiency, measured by operating expense and profits per capita, has no significant effect. Contrary to conventional views stressing internal efficiency and functional necessity, these results suggest that external factors such as the characteristics of local environment and equivalent are crucial in determining the size of debts. These findings contribute to our understanding of local public enterprises, and call for further attention on this topic by both academics and practitioners.