earticle

영어

This paper empirically analyzed the impact of the performance evaluation system on public enterprises' productivity in Korea. The Korean government evaluates the performance of all the public enterprises every year, and the result determines the amount of monetary incentive for each firm. To find out the change in firm productivity after the implementation of the performance evaluation system, the fixed effects model was estimated using the firm-level panel data from 2000 to 2009. The result shows that the effect of the performance evaluation varied across the firms. It turned out that the performance evaluation increased the amount of value added and the level of labor productivity in the large-sized public enterprises. However, it had a negative effect on value added and labor productivity in the small-sized public enterprises. Also, the profit ratio increased after the performance has been evaluated only in the public enterprises whose labor input were above average.