Abstract
PurposeState-owned enterprises (SOEs) are essential tools to further policy objectives across the world. However, in the past few decades, heated debates on the performance of SOEs vis-à-vis private sector enterprises have surfaced. In India, SOEs have long played an important role in the economy and only recently have undergone the trend of privatization. The purpose of this paper is to analyze existing research and to conclude whether private enterprises perform better than SOEs.Design/methodology/approachA review of available literature on performance comparisons of public and private sector enterprises is carried out, and differences between public and private enterprises are studied. Finally, theoretical propositions on the differences in objectives of public and private enterprises in the Indian context are enumerated. Three propositions are tested using data on Indian SOEs available in the public domain.FindingsPerformance comparisons of public and private enterprises have focused merely on technical productivity or financial aspects and have thus left out the wide scope of social, economic and political objectives of SOEs. Literature on the nature of SOEs indicates that there are certain fundamental differences in the objectives of public and private sector enterprises. Further, the basic theoretical assumptions tested have been found to be, prima facie, valid in the Indian context. The paper thus establishes a case for further research to develop a comprehensive technique for the comparison of public and private sector enterprises in the Indian context.Originality/valueExtant research on the subject of comparing public and private entries has limited itself to technoeconomic considerations and has not taken into account the different objectives/nature of these enterprises. The study established a case for diverging from the present discourse privatization and private sector supremacy. The same could have far-reaching consequences for policymakers, especially in developing countries.
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.