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Non-commercial goals and financial performance of state-owned enterprises – some evidence from the electricity sector in the EU countries

Piotr Matuszak and Bartosz Kabaciński

Journal of Comparative Economics, 2021, vol. 49, issue 4, 1068-1087

Abstract: This study considers the financial performance of state-owned enterprises (SOEs) in relation to non-commercial goals. We focus on enterprises operating in the production of electricity sector in the EU countries and analyse their profitability conditioning on the level of electricity prices. We reveal that SOEs underperform as compared to their privately owned counterparts when they operate in those markets that have lower prices. This suggests that their profitability is likely to be substantially affected by pursuing goals other than profit-maximisation - providing crucial products and services at affordable prices - and emphasises a need to consider the non-commercial objectives of SOEs in the empirical research.

Keywords: State owned enterprises; SOEs; State ownership (search for similar items in EconPapers)
JEL-codes: L21 L33 Q41 Q48 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.jce.2021.03.002

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Handle: RePEc:eee:jcecon:v:49:y:2021:i:4:p:1068-1087