Summary of Efficient Management of State-Owned Enterprises

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Efficient Management of State-Owned Enterprises summary
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Rating 

7 Overall

8 Importance

7 Innovation

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Recommendation

State-owned enterprises (SOEs) remain economically meaningful in both developing and developed countries. SOEs’ quasi-public status affords them significant benefits to provide basic public services. Yet as entities subject to regulation and enforcement by the very governments that own them, SOEs can succumb to inept or corrupt management. Researchers Chul Ju Kim and Zulfiqar Ali say SOEs can improve by adopting private sector methods. getAbstract recommends this incisive analysis to policy experts and economists.

In this summary, you will learn

  • What state-owned enterprises (SOEs) are and what they do,
  • How conflicting ownership and oversight roles can lead to SOEs’ suboptimal performance, and
  • How SOEs can incorporate private-industry standards to improve productivity. 
 

About the Authors

Chul Ju Kim and Zulfiqar Ali are deputy dean and research associate, respectively, at the Asian Development Bank Institute.

 

Summary

A state-owned enterprise (SOE) is a company over which a government exercises substantial control. SOEs are alive and well in both advanced and emerging economies. These firms manage essential public facilities such as telecommunications networks, energy grids and sanitation systems. In return, they enjoy subsidies, debt forbearance and desirable borrowing terms. SOEs are responsible for almost one-third of GDP in China, and for 25% of GDP in India and in Thailand. SOEs dominate in fast-growing nations such as the United Arab Emirates, Malaysia and Indonesia. 

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