| Corporate governance came to the center of attention of the international development agenda following the East Asian financial crisis of the late 1990s. In addition, increased privatization, financial market liberalization and high-profile corporate failures contribute to enlarged focus on corporate behavior, policies and especially management.Performance is clearly multidimensional in its nature, and several indicators (outputs) are required to characterize all essential aspects of performance. The factors (inputs) affecting performance are multidimensional as well. In practice, the relationships between outputs and inputs are often complex or unknown, making direct performance evaluations a challenging task. In the last few years Bolivia has made significant progress in these matters and showed improvement on its corporate governance standards, mechanisms and codes, applying them on State owned enterprises (SOE's) and private sector too.In this paper we intend to apply all the theoretical literature basis of corporate governance (CG) in order to proof with qualitative and quantitative methods the impact of the mechanisms, one of the most often explanation of the existence of CG is Agency theory (AT), where the literature believes there is a relationship between shareholders and directors, and it can cause a certain amount of mistrust and misunderstandings and as consequence of that it is crucial to rectified standards, policies and even strategic decisions in time and effectively.This research considered as a case study the biggest Bolivian SOEs (YPFB) and intended to determine whether or not Yacimientos Petroliferos Fiscales Bolivianos (YPFB), has been efficient after some strategic decisions taken (capitalization), where the government plays the role of the major shareholder. Or if by the time of previous years (privatized) YPFB showed more productive efficiency, in view of corporate governance mechanisms, helping to understand the relationship of corporate governance practices and enterprise performance.We have made and extensive research in YPFB, and analyzed three relevant aspects, starting for the role that corporate governance practices play in enterprise value, where our findings showed that the experience and a determined size of the Board of Directors (BDD) contribute to enterprise performance (both models) with more significance in the coefficients. The conclusions particularly reveal that the number of meetings of the Board of Directors is associated negatively with enterprise performance, as well as outside directors of the Board, but only to a certain point, this variance might be explainable at how Non-Executive directors (NED) perceived the value of financial statements of the enterprise on the other, hand we will like to bring out the significance of the correlation of BDD and NED which lead us to think that is important the presence of independent directors on the board, in order to improve their interaction but not having effect on performance ratios analyzed in this chapter.The second aspect analyzed the effect of board of director's characteristics and Corporate Social Responsibility (CSR) practices in YPFB's subsidiaries. Some characteristics of the subsidiaries boards, in particular independence and diversity, may impact the most their CSR commitments. By studying a sample seven subsidiaries for the last past 10 years, there is evidence that suggests that YPFB's subsidiaries with more presence of non-executive directors (NED) follow a path of socially responsible behavior; the contrary happened with diverse board where we found no evidence that female directors have positive effects.Regarding the third aspect, what the authors considered the most important outcome of this study, considering previous literature on the CG of developing economies which give a clear argument on whether or not ownership changes are necessary for improving the efficiency of SOEs. Some researchers point that government cannot play an active role in corporate governance therefore, privatization with ownership and control changes are necessary in order to get performance improvements of SOEs. After reviewing those findings we pursued to apply this literature scheme in a developing country (Bolivia) which their economic growth pretty much depends on the outcomes of SOEs, since they are the key factor of development, also the SOEs have been facing some structural fluctuations that are related to ownership changes (Capitalization).Chapter 5, provides empirical evidence and contributes to those assumptions, focusing on whether and it what sense corporate governance mechanisms contributes to productive efficiency. We used a sample of seven (7) SOEs -YPFB (subsidiaries) for the last decade, ever since the capitalization has been effective.Our findings are quite different from previous empirical studies, using the same method, we find that enterprise efficiency is positively related to STATE ownership, although PRIVATE and Institution investors (II) are as well but the coefficients are not significant enough. Likewise state control STATECT shows positive relation with efficiency. In terms of internal corporate governance mechanism we found that board of directors size has not significant impact with efficiency, the reason might be since the size of the board is set and throughout the time series analyzed shows to remain constant. In addition, outside directors seems to have a significant impact on efficiency, this result make sense from the fact they might need to keep in good word their names and reputation and mostly they will be highly qualify professionals with experience in the field, so they would have a positive impact on the enterprise efficiency.Overall, our results showed that the restructuring of SOEs passing through corporate governance standards (enterprise law) has improved enterprise efficiency, although we cannot imply that private and institutional investors ownership are inefficient, based on our results they are as well efficient but with less significance than the STATE.So we conclude that these outcomes contain policy implications for the ongoing corporate governance standards in Bolivia. First of all, ownership structure plays a determinant role in enterprises efficiency. As a result the government/state should concentrate efforts and resources to get back all the shares, because with more control, these enterprises will be bring more revenues to the economy welfare.Second we would like to highlight that board of directors compositions has implications on efficiency as well, so it is important to denote a set of rules to ensure the directors responsibility, duties, rights, etc. in order to get fully commitment from them and fulfill the purpose of good corporate governance practices.Given these evidences, it's establish that this research has made a contributions to the existing knowledge after reviewing the literature related to corporate governance establishing the most accurate methodology followed by other researchers, applying the method of Simar and Wilson to a new panel of data with a new perspective, where the main shareholder is the government. This methodology has been applied in context but not in details since I have had adjusted the model to the needs of my research, where the main contribution to the knowledge is the measure of performances in three bases, market-based (using equity ratios in the books like market-to-book MTB, ROA and Tobin's Q) and in the productive efficiency-based (relying on production and cost functions determined by capital, labor, factors of production on technical efficiency) in a SOE in Bolivia.Although there are plenty of references in the literature there is not sufficient proof in this particular case, where the control of the state shows a positive relationship with the enterprise performance, throughout my own development of a way of using the data obtained referring to the approached proposed, this approach it could be reapplied in future research for the same enterprises or other SOE's in Bolivia in order to keep measuring the impacts of corporate governance mechanisms on the performance.The purpose of this thesis stablishes get to know whether or not there is an impact on the efficiency of the enterprise, considering the corporate governance mechanisms and performances ratios as measurements of inputs and outputs, in order to answer the following question:Are ultimate ownership changes and monitoring/control mechanisms as management strategies necessary for improving the efficiency of SOEs?In order to answer this question I proposed three points:1) Analyzed if the role of corporate governance best practices (regulatory framework) add value to the enterprise, from marked based performance. *Using financial performance ratios variables and internal governance variables, it has been developed and estimated a multiple regression models, concluding that the regulatory framework had influence in the enterprise performance and value as well.2) Determine the relationship between board of director's characteristics and corporate social responsibility. *we found significance in the relationship of CSR and external governance mechanisms basically with the presence of Non-executive directors, but not evidence with female directors influence.3) Evaluate the improvement of productive efficiency-based performance after ownership changes and its relationship with corporate governance mechanisms.*This innovation point has focused on two aspects of internal and external corporate governance:1) ownership structure,2) productive efficiency. I aimed to explore the impact of these variables on the enterprise performance, like efficiency, type of ownership structure and monitoring and control mechanisms. Therefore, the findings prove that restructuring state-owned enterprise passing through improvements in corporate governance has enhanced enterprise efficiency, the transmission of ownership and control from private investors to the state had an impact on its efficiency. |
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