Performance Of State-owned Enterprises Research Articles

Board Composition and Performance of Indian State-owned Enterprises: Moderating Role of Leverage

Debt holders monitoring influence on the business performance has been noted in several research. Another body of research investigates the board of directors and performance linkages. The impact of debtholders on the board composition and firm performance linkage, particularly in State-Owned Enterprises (SOEs), has received little attention in the literature. As a result, this article aims to determine whether the composition of Indian SOE boards has an impact on their performance. It also looks into how leverage influences the association between the composition of Indian SOE boards and their performance. From 2001 to 2019, the panel data regression is performed on 19 Indian SOEs registered on the Bombay Stock Exchange. According to the study, board size, nominee directors improve Indian SOE performance, while independent directors reduce performance. Furthermore, in high-leverage SOEs, board of directors’ supervision is reduced or removed. The findings have implications for policymakers and the government.

State-owned Enterprise Performance Measurement Based on the 2016 Malcolm Baldrige Criteria for Performance Excellence (MBCfPE)

PT. XYZ is a state-owned enterprise that contributes to national sugar production. In running its business, the company requires performance measurement to see how far the company has achieved. This study provides an overview of performance measurement with the Malcolm Baldrige Criteria for Performance Excellence (MBCfPE) approach. This study uses a literature review and descriptive analysis. The results of the assessment show that the score achieved by PT. XYZ in 2016 was 415.75 points and was included in the early improvement performance class. Although the results have not been maximized, several assessment categories have important aspects that support the company's performance. The category that dominates and gets the highest rating is the overall Product and Process Results category with 44 points. Meanwhile, the category that has a low rating is Operations Focus for the Operational Effectiveness indicator with a score of 16 points. In the future, PT. XYZ needs to restructure its work system, supply chain management, and improve monitoring and evaluation.

Подходы к измерению государственного сектора и оценке его эффективности

Despite the increasing role of the state sector in the economies of many countries, the criteria and approaches to comparative analysis and evaluation of the performance of state-owned enterprises are still ambiguous, as are the methods for cross-country comparisons of the scale of state presence in the economy. The purpose of the article is to systematize the main approaches to measurement of the size of the state sector using Russian economy as an example, as well as to substantiate the significance of this information in assessing the performance of companies with different forms of ownership in the investment and managerial decision-making process. The problems of the information environment, such as the fragmentation of data, incomplete publication of company reports, and the specifics of national databases in different countries, complicate and distort empirical research. Meanwhile, there are significant differences in the performance of state-owned and private companies, as well as in their investment attractiveness to investors in the financial market. International approaches to solving these problems consist in the formation of consolidated and unified databases, inclusion of stateowned companies in the system of national accounts, and creation of guidelines on uniform principles of transparency and accessibility of financial reports. Given the growing restrictions on access to information along with the trend towards the growth of the state sector in Russia, there is an increasing need to develop a unified methodology to measure its scale and assess its impact on the economy, investment and stock market. The proposed methodology and the obtained empirical results allow not only to comprehensively assess the contribution of the state sector in creating GDP and increasing the capitalization of the stock market, but also to conduct comparative studies of performance indicators and stock returns in companies with different ownership structure, as well as an international empirical analysis of the state sector impact on the economies and the financial and economic performance of companies.

Investing in intrapreneurial capabilities for improved performance in state-owned enterprises

Background: State-owned enterprises (SOEs) are pivotal to the socio-economic development of any country. However, in most developing countries, these entities are failing to execute their mandate effectively. State-owned enterprises have failed to be responsive to citizens’ needs and deliver public value efficiently because of low investment in intrapreneurial activities by leadership in these entities.Aim: This study set out to examine the effect of intrapreneurial capabilities (ICs) on organisational performance of SOEs.Setting: The population under study was SOEs in Zimbabwe, located in the Southern African Development Community, in Africa.Methods: The study used a qualitative research design. Interviews were the main data collection technique. Data collected from interviews were analysed using thematic network analysis. Document analysis was also used to establish the performance of the SOEs.Results: The study established that ICs have a significant influence on the organisational performance of SOEs. Organisations with stronger ICs developed greater strategic agility and delivered greater public value, in terms of service delivery, customer satisfaction, financial performance and social impact.Conclusion: The study provided evidence of the influence of ICs on intrapreneurial activities and consequently on organisational performance. The study will assist leadership in SOEs to invest in an intrapreneurial architecture in order to assist SOEs to deliver both economic and public value.Contribution: The study has important implications for both practitioners and researchers in that it highlights the importance of investing in superior IC as a means of addressing service and performance challenges faced by SOEs.

Does ESG performance promote vitality of capital market? Analysis from the perspective of stock liquidity

Environmental, Social, and Governance (ESG) is changing from a concept to corporate soft power. Can this improve corporate performance in capital markets? There is little literature linking environmental, Social, and Governance performance to stock liquidity. Therefore, It is of urgent theoretical and practical importance to study the impact of environmental, Social, and Governance performance on stock liquidity. Using Chinese A-share listed companies from 2015 to 2020 as a sample to empirically examine the impact of environmental, Social, and Governance performance on stock liquidity and its mechanism. We find that environmental, Social, and Governance performance has a significant positive impact on listed companie’s stock liquidity. This conclusion was validated after conducting a series of robustness tests. Mechanism analysis shows that environmental, Social, and Governance performance can promote stock liquidity by reducing agency costs, increasing the proportion of foreign ownership, and improving corporate reputation. The heterogeneity analysis shows that environmental, Social, and Governance performance in state-owned enterprises, heavily polluting enterprises, and enterprises in areas with low degrees of marketisation has a more significant positive promoting effect on stock liquidity. This study expands the research on environmental, Social, and Governance performance and has implications for promoting the development of environmental, Social, and Governance practices.

PERFORMANCE IN SOE TWO TIERS BOARD SYSTEM BASED ON THE IMPLICATION FROM GOOD CORPORATE GOVERNANCE AND TUNNELING OR PROPPING THROUGH RELATED PARTY TRANSACTIONS

This study is to provide empirical evidence about the performance of State-Owned Enterprises in Indonesia with a two-tier board system, on the effect of GCG and tunneling or propping through related transactions. This research uses data in the form of annual reports of State-Owned Enterprises. The results of this study showed that 69% were showing related transactions indicated tunneling and 31% showed related transactions indicated propping. Furthermore, the results obtained that the performance was simultaneously affected by GCG and tunneling. Partially GCG has a positive effect on performance, while tunneling or propping does not affect. The limitation of this research is that there are only 22 state-owned companies whose shares are partly owned by the public, during 2014-2019. The implication is that SOE need to continue to improve GCG to improve SOE’s performance, so that the possibility of tunneling which is a form of detrimental control can be minimized. This study shows that tunneling in state-owned companies is not in the form of taking cash or assets, but taking profits through control, coercion, and regulation. This study uses the performance measure based on the Malcolm Baldridge criteria.

Relationships between human resource management practices, employees’ job satisfaction, and business performance in state-owned enterprises: A case study of enterprises in Vietnam posts and telecommunications group

The study aims to explore and measure the relationships between human resource management practices, employees’ job satisfaction, and business performance in state-owned enterprises in Vietnam – A case study of enterprises in Vietnam Posts and Telecommunications Group (VNPT). The study adopts qualitative research, combined with quantitative research by CB-SEM The research data were collected from August 2021 to December 2021 by email and online survey with 621 staff currently working at VNPT in 18 provinces and cities representing 6 telecommunications service regions in nationwide Vietnam. The research results show that the human resource management practice at VNPT enterprises includes 7 components (job identification, recruitment, training and progression, performance appraisal, compensation, empowerment, and labor relations). They all have a strong influence on the employees’ job satisfaction and the business performance of VNPT enterprises. However, the influence of the employee’s job satisfaction on the business performance of these enterprises has not been found

The Effect of Budget Control on Financial Performance among State-Owned Enterprises: Towards Enhancing A Budget Management Control Policy

Rwanda’s state-owned enterprises (SOEs) are suffering from poor financial performance. For instance, 60% of them are at a loss from 2016-to-date. For example, five companies, KTRWANDA NETWORKS, MARAPHONE RWANDA, and AFRICA OLLEH SERVICES LTD, which are 49%, 95%, and 49% respectively owned by the government of Rwanda, have accumulated US$5 million in losses each year for the last five years. Based on the above problem, the study intended to assess the link between budget control and the financial performance of SOEs in Rwanda. The study analyzed the seven objectives. The components of budget control understudy include budget planning, budget control, budget implementation, and budget review. The components of financial performance are Liquidity, Profitability, and Solvency. The research is descriptive research using both qualitative and quantitative approaches. It is also correlational research because it tested the relationship between budget control as an independent variable and financial performance as the dependent variable. The respondent of this study is 106 employees of seven selected SOEs. The researcher used the questionnaire to collect primary data and as an instrument of the study. And financial report for secondary data. Descriptive statistics like Frequency and Percentage and mean and inferential statistics Correlation and regression were used to analyze data. Findings showed that in general, the level of budget planning was high with a mean of 3.75. In the general, the level of budget implementation is high with a mean of 3.78. In general, the level of budget review is high with a mean of 3.67. In general, the level of liquidity in the companies was high with a mean of 3.66. In general, the level of profitability was moderate in the last five years, with a mean of 2.96. In general, the level of solvency was high with a mean of 3.59. Generally, there is a low significant relationship between Budget Control and financial performance with a coefficient of correlation of 0.384 with a P-value of 0.000. The multiple regressions showed R Square is 0.217 showing that the budget control contributes 22% to financial performance. The challenges related to budgeting control include unpredictable market, cash flows constraint, overspending versus planned, Rigid Decision-Making, Lack of trained and skilled labor, No clear budget lines in place and absence of regular budget control, limited is available to cash, Unbudgeted activities, Not complying to the rules and regulations of the budget, Insufficient cash to meet the budgeted costs, Unplanned activities due to government priorities, fluctuation in prices for commodities and Cash inflation. The challenges related to financial performance include the Lack of modern technology, High expenses and not achieved expected revenues, lack of a core system that can control all finance modules, Accuracy and timely arrival of monthly management reports, Lack of Ownership of finance performance by all staff, Recovery that may take longer than expected, Risks associated with worldwide inflation, Cost of importation, Poor marketing and reliance on public tenders. Good investment analysis, poorly managed subsidiaries. As recommendations, the management should strive to increase the profitability of their companies from a moderate level to a high level. The management should try to increase the effect of budget control on financial performance which was 22%. The management should make a deep analysis to check why their Budget planning is not affecting their financial performance when it is known that there should be a positive effect.

The Debate on the state-owned enterprises performance in the country : main arguments

The seventh text, by Paulo Kliass, continues the debate on state-owned companies in Brazil. In this study, originally published in December 2018, the author describes the main arguments historically adopted in Brazil against the long tradition of establishing state-owned companies. Among the arguments the following stand out, motivations of ideological nature, the belief in private efficiency, and pragmatic measures to solve fiscal problems.

PENGARUH GOOD CORPORATE GOVERNANCE DAN INTELLECTUAL CAPITAL TERHADAP FINANCIAL PERFORMANCE PERUSAHAAN BUMN

The objective of this research is to obtain empirical evidence about the effect of good corporate governance which include audit committee, board size, independent commissioner and intellectual capital on financial performance in state-owned enterprises listed on the Indonesia Stock Exchange (IDX) during the year 2015-2019. This study uses secondary data. This research is conducted with a sample of 59 state owned enterprises data with the technique used in this study is purposive sampling. The research data was processed using Statistical Product and Service Solution software for Windows version 23 (SPSS version 23). The results of this research show that the intellectual capital and independent commissioner have a significant influence on financial performance, while audit committee and board size do not have a significant effect on financial performance. The implication of this study is the need to increase the role of audit committee, board of directors and independent commissioner to increase good corporate governance and manage intellectual capital that will increase the firm financial performance.

Analysis of the Financial Performance of State-Owned Enterprises in the Infrastructure Sector Listed on the Indonesia Stock Exchange

State-Owned Enterprises are business entities whose capital is mainly sourced from the state and has a role in providing for society's needs. This research aims to find out and compare the performance of companies that focus on the company's financial aspects based on the assessment of eight financial ratio indicators in the Decree of the Minister of SOEs Number: KEP-100/MBU/2002 on state-owned companies in the infrastructure sector on the IDX in 2019-2021. This research used descriptive qualitative method. The results showed that PT. Telekomunikasi Indonesia Tbk and PT.Wijaya Karya Bangunan Gedung Tbk are the state-owned company with a healthy financial performance from 2019 to 2021.

The impact of human capital on supply chain management performance in state-owned enterprises in Gauteng, South Africa

The impact of human capital on supply chain management performance in state-owned enterprises in Gauteng, South Africa

Research on the Impact of Party Organization Embedding on the Corporate Environmental Performance

The party organization’s participation in the governance of state-owned enterprises can affect corporate environmental performance. First of all, in terms of stakeholders’ theories, enterprises should not pursue the interests of shareholders in the traditional sense, but to maximize the overall interests of stakeholders. As a special group in China’s corporate governance, the party organization has the right to participate in the decision of major environmental matters on the corporate. At the same time, the party organization urges enterprises to support the policies of the party, play an important role in supervising the environmental performance of the enterprise, and then maintain the overall interests of the stakeholders. Secondly, under the framework of organizational legitimacy, the party organization embedded mainly through the supervision effect and checks and balance effects to improve the environmental performance of the enterprise. Therefore, this paper studies the relationship between party organizations participating in the governance of state-owned enterprises and corporate environmental performance. This paper argues that the "two-way entry" of the party organization has a positive correlation with the corporate environmental performance, that is, the higher the "two-way entry" of party organizations participating in the governance of state-owned enterprises, the higher the environmental performance of state-owned enterprises will be improved accordingly. Also, after further robustness tests, this conclusion is still established.

PIDE Commentary: On the 23rd IMF Programme for Pakistan


 
 
 
 
 International Monetary Fund (IMF) issued a staff report on the seventh and eighth reviews of the extended arrangement under the Extended Fund Facility (EFF) on September 1, 2022. As per the review report, the authorities of Pakistan are allowed to draw USD 1.1 billion, keeping in view the measures taken by authorities to address fiscal and external challenges. The IMF board has also approved the extension of the EFF till June 2023 along with extra Special Drawing Rights (SDR) of 720 million and that brings the total access under the EFF to about USD 6.5 billion. The review report has also identified some priority measures to be considered by the Pakistani authorities, such as the implementation of an approved budget, marketdetermined exchange rate policy, proactive and prudent monetary policy, the expansion of the social safety net, and structural reforms related to the performance of state-owned enterprises (SOEs) and governance. The set of measures that have been identified contains both short-term and medium-term measures to promote long-term growth. In this regard, the Pakistan Institute of Development Economics (PIDE) has also been working extensively to identify the measures that are necessary to remove the bottlenecks in the economy to improve productivity and increase growth. Therefore, the objective of this document is twofold, i.e., a commentary on the measures suggested by the review report, and what other measures should be part of the programme.
 
 
 
 

Impact of Environmental Tax on Corporate Sustainable Performance: Insights from High-Tech Firms in China.

High-tech enterprises play an important role in leading the future industrial transformation, and their sustainable development deserves attention. Using data of 263 high-tech listed firms in China, we explore the impact of environmental tax on corporate sustainable performance, and the mediating role of green innovation. The results show that environmental tax positively affects corporate green innovation. However, the impact of environmental tax on the sustainable performance of state-owned enterprises and private enterprises is quite different. For private enterprises, environmental tax has an inverted U-shaped impact on both corporate financial performance and environmental-social performance. Furthermore, green innovation mediates the relationship of environmental tax and financial performance. In contrast with private enterprises, for state-owned enterprises, environmental tax has a negative linear impact on corporate financial performance. There is no empirical evidence supporting the effect of environmental tax on the environmental social performance of state-owned enterprises. The results imply that the government should implement different tax policies according to the firms' characteristics, to promote the corporate sustainable development, especially state-owned enterprises.

State-Owned Enterprises (SOEs): The Role in Economic Development and The Determinant of Its Performance

The Indonesian government conduct several strategies to enhance the SOE’s performance. However, some financial indicators show that reform program has not optimally achieved the objective to enhance the SOE performance. Therefore this paper is aimed to discuss some underlying factors that influence the SOE performance. As a result, the study found that contribution of Indonesia SOEs to economy is relatively low and stagnant. Besides that, many SOEs have not yet operated optimally. The regression result show the financial condition of the SOE is getting better when it have higher ability to generate profits and pay off debts. In addition, ability to pay off the debts is more important to maintain the financial performance of SOEs, than ability to generate profit. This study also indicate inefficiency in managing employee and policy formulation in Indonesia’s SOE.

Effect of Heuristic Decision-making on Performance of State-Owned Enterprises in Kenya: A Case of Kenya Power Company

Heuristic decision-making is part of strategic decision-making. This study sought to examine the status of heuristic decision-making and organizational performance of Kenya Power Company. Moreover, the extent to which heuristic decision-making influenced the performance of the aforementioned company was analyzed. The study was conducted against a backdrop of acknowledged performance challenges. The poliheuristic theory of decision-making and the balanced scorecard model guided the study. A descriptive research design was adopted. The 31 senior management staff of Kenya Power were targeted. A census design was employed to obtain the study participants. The data collected from these participants were analyzed with the assistance of the Statistical Package for Social Sciences. Descriptive statistics, as well as inferential statistics, were used to analyze the collected data. It was revealed that the relationship between heuristic decision-making and organizational performance was positive though weak (rs = 0.340) and not statistically significant (p = 0.104 > 0.05). The effect of heuristic decision-making on organizational performance was established not to be statistically significant (F1,22 = 3.181; p = 0.088 > 0.05). Consequently, the null hypothesis (There is no significant effect of heuristic decision-making on the performance of Kenya Power) was not rejected. Instead, it was also concluded to be true. Heuristic decision-making was inferred to have minimal effect on the organizational performance of Kenya Power. It was recommended that senior managers should have a duty to ensure that the heuristics embraced by the company are reliable in making pertinent decisions.

Does the mixed‐ownership reform improve the productivity of state‐owned enterprises? Evidence from companies listed in Chinese stock

AbstractThe Chinese government initiated a new round of state‐owned enterprise (SOE) reform in 2015 to improve SOE's performance with a focus on introducing multiple ownership shareholders and strategic partners, known as the mixed‐ownership reform (MOR). This paper examines the policy effectiveness of the current MOR, an ongoing quasi‐experiment, for listed SOEs’ productivity from 2011 to 2019 using a time‐varying difference‐in‐difference (DID) approach. Overall, the total factor productivity (TFP) of SOEs selected as pilots by the government improved significantly by 14.57% after the reform compared to other SOEs, providing evidence for the positive role of the current MOR. This positive impact is prolonged and tends to increase in the post‐reform years. A series of robustness checks show that our empirical specification satisfies the basic assumptions of DID and our findings are robust. By comparing the two reform strategies in the MOR, we find that the restructuring and reorganization plan is the primary channel driving TFP growth, showing a 0.4% improvement after the reform, rather than the employee stock ownership plan. We also investigate the impact of MOR on other financial and non‐financial indicators, but we only find a significant increase in the profitability of SOEs’ assets.

Corporate Governance and Financial Performance of State-Owned Enterprises Compared to Listed Firms in Zambia: 2002-2017

The study was a comparative analysis of the corporate governance practices and firm financial performances between State-Owned Enterprises and listed firms in Zambia. Using a cross-sectional panel data set covering the period 2002 to 2017, the t-test statistic was employed to compare the corporate governance practices and firm financial performances between unlisted State-Owned Enterprises, listed State-Owned Enterprises and listed private firms. It was found that corparate governance practices and firm financial performances between State-Owned Enterprises and listed firms in Zambia were significantly different. The board sizes for listed firms were statistically significantly less than those of State-Owned Enterprises and the proportion of non-executive directors on the boards of listed firms were also statistically significantly less than those of State-Owned Enterprises. On the other hand the proportion of female directors on listed firms were statistically significantly more than those of unlisted State-Owned Enterprises. In terms of firm financial performance, it was found that the mean of the Return on Total Assets for listed private firms was statistically significantly greater than the mean for unlisted State-Owned Enterprises. There were significant effect sizes in all the measured variables. This was a country specific study that contributed to the empirical knowledge on corporate governance practices and financial performances in State-Owned Enterprises and listed firms. The findings are of interest to researchers, corporate governance practitioners and government policy makers.

Employee Work Performance in State-Owned Enterprises in Indonesia: A Reflection

The quality of performance of State-Owned Enterprises (SOEs) in Indonesia is currently in the spotlight because it is considered unsatisfactory. One of the causes of the low performance of this organization is the level of quality of performance of the organization's employees which is also unsatisfactory. In this study, factors that can affect the quality of performance of SOEs employees in Indonesia are analyzed. These factors include leadership style, work discipline, work motivation and work environment. Data were collected by distributing questionnaires to a number of field employees and validity and reliability tests were carried out on the data. Hypothesis testing is done by using Multiple Linear Regression test. The results of this study prove that only achievement-oriented leadership style and work motivation can boost the quality of performance of SOEs employees; work discipline and work environment do not have any impact on improving the quality of their performance. This proves that a leader who can provide motivation and read reward needs for employees is very much needed in SOEs. However, issues of discipline and work environment should also get more attention. The implication of this research is that SOEs must assess employee performance in terms of the quality of work and not only in terms of the achievement of the set target without paying attention to the quality of the achievement itself.