Abstract
There are multiple reasons for state to own control of industry. Profit making may or may not be one of them. Researchers have conducted empirical studies on the performance of State-Owned Enterprises (SOEs) vis-à-vis private ones and to a large degree concur that SOEs underperform in comparison. The Indian government has realized that SOEs are a drag on the economy and hence have engaged in privatization and sell-out efforts. Still, the Indian state owns about 277 enterprises, of which 46 are listed on Bombay Stock Exchange (BSE). Theoretically, listed SOEs are subject to the same market scrutiny and discipline as are the private listed companies. This study at first explains the rationale behind the state’s ownership of industry and how SOEs are organized in India, following which it compares the performance of the listed SOEs with their private competitors. For a better comparison, private firms that mimic SOEs in terms of ownership concentration are picked for the study. The findings show that the SOEs perform marginally better than their private counterparts. It is concluded that their better performance could be due to the oligopolistic conditions
they operate in and as also possibly because of their business age.
they operate in and as also possibly because of their business age.
Original language | English |
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Peer-reviewed scientific journal | The IUP Journal of Corporate Governance |
Volume | 14 |
Issue number | 3 |
Pages (from-to) | 7-24 |
ISSN | 0972-6853 |
Publication status | Published - 2015 |
MoE publication type | A1 Journal article - refereed |
Keywords
- 511 Economics
- Firm Performance,
- State-owned enterprises
- 512 Business and Management
- Corporate Governance
- India