Effects of corporate governance on the performance of state-owned enterprises

Kyoungsun Heo

No 8555, Policy Research Working Paper Series from The World Bank

Abstract: State-owned enterprises play an important role in economic growth and the delivery of critical public services such as health, education, water, and energy. The underperformance of state-owned enterprises can lead to significant challenges in overall national growth and competitiveness and pose a fiscal risk to the government. Consequently, improving the performance of state-owned enterprises remains an important issue for policy makers and development practitioners. More recently, efforts to strengthen corporate governance have been gaining international momentum as a means to improve the performance of state-owned enterprises. This study aims to examine the relationship between corporate governance and the performance of state-owned enterprises. Using data from 320 state-owned enterprises in the Republic of Korea, the study examines the effects of corporate governance on various measures of state-owned enterprise performance, including performance evaluation results, customer satisfaction, and financial performance. The empirical results indicate that board size, corporatization, and transparency and disclosure are positively related to the performance of state-owned enterprises, suggesting that they have an impact on the efficiency of state-owned enterprises. Independence of the board of directors and separation between the positions of board chair and chief executive officer have an insignificant or negative impact on specific measures of performance. These results suggest that a larger board, corporatization of state-owned enterprises, and more transparent disclosure practices can be beneficial for the performance of state-owned enterprises.

Keywords: Capital Markets and Capital Flows; Multinational&Corporate Governance; Civic Participation and Corporate Governance; Capital Flows; Corporate Governance; Public Sector Economics; Public Finance Decentralization and Poverty Reduction; Hydrology; State Owned Enterprise Reform; Democratic Government; Privatization; Public Sector Administrative&Civil Service Reform; Energy Privatization; De Facto Governments; Economics and Finance of Public Institution Development; Public Sector Administrative and Civil Service Reform (search for similar items in EconPapers)
Date: 2018-08-16
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://documents.worldbank.org/curated/en/523421534424982014/pdf/WPS8555.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:8555

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().