Financial returns from new public management: a New Zealand perspective

Abstract

PurposeThe purpose of this study is to consider the potential for profit under new public management, through a study of New Zealand's state‐owned enterprises (SOEs).Design/methodology/approach“Examination from the outside” involved analysis of financial data from 2001 to 2005 for the SOE sector. “Inquiry from the inside” involved interviews with senior executives from 12 of the 17 SOEs operating in New Zealand.FindingsFindings indicate the potential for SOEs as profitable government investments, with clear support for financial returns under NPM.Research limitations/implicationsWhile this study is limited to SOEs in New Zealand, it provides valuable insight into one country's SOE sector, and offers a platform for similar studies in other countries. Strong financial returns from several SOEs highlight the potential for SOEs as valuable investments, and an important alternative to traditional sources of government funding. However, variations noted in the financial returns of individual SOEs also indicate that profitable and commercial operations may not be possible in all cases.Originality/valueThe value of this paper lies in the combination of quantitative and qualitative data, to provide insight not only into SOEs' financial performance, but also into the operational and strategic issues underlying that performance.