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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.
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    References listed on IDEAS

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    Cited by:

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    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. 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.

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    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

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