IDEAS home Printed from https://ideas.repec.org/a/aka/aoecon/v69y2019i4p549-570.html
   My bibliography  Save this article

The Scale and Financial Performance of State-Owned Enterprises in the CEE Region

Author

Listed:
  • Piotr Matuszak

    (Department of Macroeconomics and Development Studies, Poznan University of Economics and Business, Poland)

  • Katarzyna Szarzec

    (Department of Macroeconomics and Development Studies, Poznan University of Economics and Business, Poland)

Abstract

The paper aims to analyse state-owned enterprises (SOEs) in 11 post-socialist Central-Eastern European (CEE) countries. Based on the individual data of large non-financial companies, we estimated the real state share in the years 2014 and 2015. We consider both direct and indirect state ownership and apply an explicit classification of companies as majority and minority state-owned, which is neglected in a lot of research. The countries with the highest values of the ‘Country SOE index’ were Slovenia and Latvia, while the lowest were Lithuania and Hungary. State ownership is dominant in transportation and storage and energy supply. The lower return on assets (ROA), return on equity (ROE) and return on capital employed (ROCE) ratios of SOEs imply that capital in this group of companies is used less efficiently. Furthermore, they are characterised by higher wage costs. At the same time, SOEs have higher earnings before interest, taxes, depreciation and amortization (EBITDA) margins and better ability to turn operating revenue into cash than their privately-owned counterparts.

Suggested Citation

  • Piotr Matuszak & Katarzyna Szarzec, 2019. "The Scale and Financial Performance of State-Owned Enterprises in the CEE Region," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 69(4), pages 549-570, December.
    • Handle: RePEc:aka:aoecon:v:69:y:2019:i:4:p:549-570
    Note: This work was supported by the National Science Centre Poland under Grant number 2015/17/B/ HS4/00327. We thank the participants of the 3rd Conference “The Role of State in Varieties of Capitalism”, held at the Central European University, Budapest, Hungary (30 November – 1 December 2017) for their comments on an earlier version of this paper. We take exclusive responsibility for all the opinions expressed in this study.
    as

    Download full text from publisher

    File URL: http://www.akademiai.com/doi/pdf/10.1556/032.2019.69.4.4
    Download Restriction: subscription
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Andrei Shleifer, 1998. "State versus Private Ownership," Journal of Economic Perspectives, American Economic Association, vol. 12(4), pages 133-150, Fall.
    2. János Kornai, 2014. "The soft budget constraint," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 64(supplemen), pages 25-79, November.
    3. Katarzyna Szarzec & Wanda Nowara, 2017. "The economic performance of state-owned enterprises in Central and Eastern Europe," Post-Communist Economies, Taylor & Francis Journals, vol. 29(3), pages 375-391, July.
    4. Estrin, Saul & Perotin, Virginie, 1991. "Does ownership always matter?," International Journal of Industrial Organization, Elsevier, vol. 9(1), pages 55-72, March.
    5. Maciej Bałtowski & Piotr Kozarzewski, 2016. "Formal and real ownership structure of the Polish economy: state-owned versus state-controlled enterprises," Post-Communist Economies, Taylor & Francis Journals, vol. 28(3), pages 405-419, July.
    6. Brian Snowdon, 2007. "Globalisation, Development and Transition," Books, Edward Elgar Publishing, number 4183.
    7. Shleifer, Andrei & Vishny, Robert W, 1997. "A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-783, June.
    8. John Vickers & George Yarrow, 1991. "Economic Perspectives on Privatization," Journal of Economic Perspectives, American Economic Association, vol. 5(2), pages 111-132, Spring.
    9. Talis Putnins, 2015. "Economics of State-Owned Enterprises," Published Paper Series 2015-3, Finance Discipline Group, UTS Business School, University of Technology, Sydney.
    10. Bortolotti, Bernardo & Cambini, Carlo & Rondi, Laura, 2013. "Reluctant regulation," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 804-828.
    11. Massimo Florio, 2014. "The return of public enterprise," Working Papers 201401, CSIL Centre for Industrial Studies.
    12. Justin Yifu Lin, 2012. "New Structural Economics : A Framework for Rethinking Development and Policy," World Bank Publications - Books, The World Bank Group, number 2232.
    13. Piotr Kozarzewski & Maciej Ba³towski, 2016. "Change in Economic Policy Paradigm: Privatization and State Capture in Poland," CASE Network Reports 0127, CASE-Center for Social and Economic Research.
    14. Przemyslaw Kowalski & Max Büge & Monika Sztajerowska & Matias Egeland, 2013. "State-Owned Enterprises: Trade Effects and Policy Implications," OECD Trade Policy Papers 147, OECD Publishing.
    15. Hans Christiansen, 2013. "Balancing Commercial and Non-Commercial Priorities of State-Owned Enterprises," OECD Corporate Governance Working Papers 6, OECD Publishing.
    16. Elisa Borghi & Chiara Del Bo & Massimo Florio, 2016. "Institutions and Firms' Productivity: Evidence from Electricity Distribution in the EU," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 78(2), pages 170-196, April.
    17. A. Abramov & A. Radygin & M. Chernova & R. Entov., 2017. "State ownership and efficiency characteristics," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 4.
    18. Miklós Szanyi, 2016. "The Reversal of the Privatisation Logic in Central European Transition Economies (An Essay)," Acta Oeconomica, Akadémiai Kiadó, Hungary, vol. 66(1), pages 33-55, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Katarzyna Szarzec, 2023. "Przedsiębiorstwa państwowe we współczesnej gospodarce – cele i uwarunkowania efektywności działania," Ekonomista, Polskie Towarzystwo Ekonomiczne, issue 3, pages 295-314.
    2. Szarzec, Katarzyna & Dombi, Ákos & Matuszak, Piotr, 2021. "State-owned enterprises and economic growth: Evidence from the post-Lehman period," Economic Modelling, Elsevier, vol. 99(C).
    3. Piotr Kozarzewski, 2021. "State Corporate Control in Transition: Challenges and Goals," Springer Books, in: State Corporate Control in Transition, chapter 0, pages 41-92, Springer.
    4. Matuszak, Piotr & Kabaciński, Bartosz, 2021. "Non-commercial goals and financial performance of state-owned enterprises – some evidence from the electricity sector in the EU countries," Journal of Comparative Economics, Elsevier, vol. 49(4), pages 1068-1087.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Katarzyna Szarzec & Wanda Nowara & Mirosława Żurek, 2017. "Forma własności a wyniki ekonomiczne największych przedsiębiorstw krajów Europy Środkowo-Wschodniej," Gospodarka Narodowa. The Polish Journal of Economics, Warsaw School of Economics, issue 3, pages 89-114.
    2. Szarzec, Katarzyna & Dombi, Ákos & Matuszak, Piotr, 2021. "State-owned enterprises and economic growth: Evidence from the post-Lehman period," Economic Modelling, Elsevier, vol. 99(C).
    3. Bartosz Totleben & Katarzyna Szarzec & Andreas Kardziejonek, 2019. "Rent-seeking by politicians in state-owned enterprises," Ekonomia i Prawo, Uniwersytet Mikolaja Kopernika, vol. 18(4), pages 515-529, December.
    4. Bram De Lange & Bruno Merlevede, 2020. "State-Owned Enterprises across Europe: Stylized Facts from a Large Firm-level Dataset," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 20/1006, Ghent University, Faculty of Economics and Business Administration.
    5. Clò, Stefano & Florio, Massimo & Rentocchini, Francesco, 2020. "Firm ownership, quality of government and innovation: Evidence from patenting in the telecommunication industry," Research Policy, Elsevier, vol. 49(5).
    6. Chen Lin & Yue Ma & Dongwei Su, 2009. "Corporate governance and firm efficiency: evidence from China's publicly listed firms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 30(3), pages 1-1.
    7. Katarzyna Szarzec, 2023. "Przedsiębiorstwa państwowe we współczesnej gospodarce – cele i uwarunkowania efektywności działania," Ekonomista, Polskie Towarzystwo Ekonomiczne, issue 3, pages 295-314.
    8. Matuszak, Piotr & Kabaciński, Bartosz, 2021. "Non-commercial goals and financial performance of state-owned enterprises – some evidence from the electricity sector in the EU countries," Journal of Comparative Economics, Elsevier, vol. 49(4), pages 1068-1087.
    9. Pradeep Kautish, 2010. "Study On Impact Of Environmental Change On Selected Public Sector Enterprises In India," Romanian Economic Business Review, Romanian-American University, vol. 5(2), pages 68-88, June.
    10. Ichiro Iwasaki & Satoshi Mizobata & Alexander Muravyev, 2018. "Ownership dynamics and firm performance in an emerging economy: a meta-analysis of the Russian literature," Post-Communist Economies, Taylor & Francis Journals, vol. 30(3), pages 290-333, May.
    11. Tleubayev, Alisher & Bobojonov, Ihtiyor & Gagalyuk, Taras & García Meca, Emma & Glauben, Thomas, 2021. "Corporate governance and firm performance within the Russian agri-food sector: does ownership structure matter?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 24(4), pages 649-668.
    12. Nobuaki Hamaguchi, 2002. "Will The Market Keep Brazil Lit Up? Ownership And Market Structural Changes In The Electric Power Sector," The Developing Economies, Institute of Developing Economies, vol. 40(4), pages 522-552, December.
    13. Henk Berkman & Rebel A. Cole & Lawrence J. Fu, 2014. "Improving corporate governance where the State is the controlling block holder: evidence from China," The European Journal of Finance, Taylor & Francis Journals, vol. 20(7-9), pages 752-777, September.
    14. Boardman, Anthony E. & Vining, Aidan R. & Weimer, David L., 2016. "The long-run effects of privatization on productivity: Evidence from Canada," Journal of Policy Modeling, Elsevier, vol. 38(6), pages 1001-1017.
    15. Xinyu Yu & Ping Wang, 2020. "Government control and the value of cash: evidence from listed firms in China," Review of Quantitative Finance and Accounting, Springer, vol. 55(4), pages 1341-1369, November.
    16. Stefano Clò & Matteo Ferraris & Massimo Florio, 2015. "Public Enterprises in a Global Perspective in the Last Decade," L'industria, Società editrice il Mulino, issue 1, pages 111-138.
    17. Cambini, Carlo & De Masi, Sara & Paci, Andrea & Rondi, Laura, 2018. "CEO compensation in EU telecom companies: Does the state design the right incentives?," Telecommunications Policy, Elsevier, vol. 42(6), pages 474-488.
    18. Caroline Stiel & Astrid Cullmann & Maria Nieswand, 2015. "Productivity in Electricity Retail after Market Liberalisation: Analysing the Effects of Ownership and Firm's Governance Structure," Discussion Papers of DIW Berlin 1531, DIW Berlin, German Institute for Economic Research.
    19. Phi, Nguyet Thi Minh & Taghizadeh-Hesary, Farhad & Tu, Chuc Anh & Yoshino, Naoyuki & Kim, Chul Ju, 2019. "Performance Differential Between Private and State-Owned Enterprises: An Analysis of Profitability and Leverage," ADBI Working Papers 950, Asian Development Bank Institute.
    20. Michal Jurek, 2014. "Role and impact of different types of financial institutions on economic performance and stability of the real sector in selected EU member states," Working papers wpaper36, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.

    More about this item

    Keywords

    state-owned enterprises; Central and Eastern Europe; post-socialist countries; financial performance;
    All these keywords.

    JEL classification:

    • H82 - Public Economics - - Miscellaneous Issues - - - Governmental Property
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions
    • P43 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Finance; Public Finance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aka:aoecon:v:69:y:2019:i:4:p:549-570. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Kriston, Orsolya (email available below). General contact details of provider: https://akademiai.hu/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.