Abstract
Abstract. Management efficiency of state-owned enterprises (SOE) is being widely discussed not only in Lithuania, Central Eastern Europe, but also globally (mainly focusing on such countries as China, having state monopoly in most of the industries). Moreover, this topic is interesting to scholars both in the context of public governance reforms and a specific area of public administration. On the other hand, the topic of SOEs management is quite specific due to its duality: firstly, it is an area of public governance with an intensive intervention of the government, and secondly, SOEs are autonomous enterprises having dual – social (e.g., creation of work places, implementation of state-level projects, etc.) and economic (e.g., profitability, return on investment, etc.) – goals. Following the paradigms of (post) new public governance, principal agent theory, corporate governance guidelines established by such international organizations as the OECD, World Bank, International Monetary Fund and others, this paper is focusing on the management and performance of SOEs, trying to find an evidence of positive effects related to the implementation of corporate governance principles in Lithuanian SOEs. The paper seeks to identify those aspects of corporate governance which are the most relevant in terms of their potential effect on the management efficiency of Lithuanian SOEs.Key words: state-owned enterprises, corporate governance, principal agent theory, management efficiency
Highlights
The management efficiency of the state-owned enterprises is being widely discussed in Lithuania, Central Eastern Europe, and globally
Even though the main independent variables used for this research are related to the indicators of corporate governance (see (i)-(iii) points above), the below listed determinants were included into the analysis to be able to specify the effects of a variable used by certain categories: a) industry of state-owned enterprises (SOE) b) monopolization of the industry and / or its openness to the market c) SOE being listed in the stock-exchange d) type of the company and functions attributed to it (SOEs performing in the commercial sector should show better financial results and / or overall performance) e) legal form of the SOE. This analysis is meant to explain the potential effects of corporate governance (the composition of the main independent variables (i)–(iii) is specified in the table below) to the SOE management efficiency, which in this paper is analyzed via Return on Equity and Earnings Before Interest, Taxes, Depreciation and Amortization
It should be stated that this paper could be treated as one of the few attempts to evaluate the effect of the quality management and / or corporate governance on the SOEs as a subject of public administration
Summary
The management efficiency of the state-owned enterprises (hereinafter SOEs) is being widely discussed in Lithuania, Central Eastern Europe (hereinafter CEE), and globally (mainly focusing on such countries as China, having state monopoly in most of the industries). Even though the main independent variables used for this research are related to the indicators of corporate governance (see (i)-(iii) points above), the below listed determinants were included into the analysis to be able to specify the effects of a variable used by certain categories: a) industry of SOE (financial results of the SOE – such as profitability margins – would be strongly related to the profitability of the industry) b) monopolization of the industry and / or its openness to the market (increasing competition should have a positive influence on the managerial efficiency) c) SOE being listed in the stock-exchange (public listing of the SOEs should increase the pressure for the organization to show better results) d) type of the company and functions (goals) attributed to it (SOEs performing in the commercial sector should show better financial results and / or overall performance) e) legal form of the SOE (joint stock companies should show a better performance as compared to companies acting as “state companies”2) As discussed above, this analysis is meant to explain the potential effects of corporate governance (the composition of the main independent variables (i)–(iii) is specified in the table below) to the SOE management efficiency (a dependent variable), which in this paper is analyzed via Return on Equity (hereinafter ROE3) and Earnings Before Interest, Taxes, Depreciation and Amortization (hereinafter EBIDTA4)
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