The impact of the corporatization process on the financial performance of Canadian state‐owned enterprises
- 1 February 2003
- journal article
- Published by Emerald in International Journal of Public Sector Management
- Vol. 16 (1), 27-47
- https://doi.org/10.1108/09513550310456409
Abstract
State‐owned enterprises (SOEs) have been described as being inefficient and losing money. The theories pretend that private property rights will solve the problem. In practice, SOEs are reorganized to follow the model of the private firm, a period known as the public sector corporatization. One critical element of this reform is an important modification of the mission of the firm away from social and toward profitability goals. Most SOEs become profit‐seeking organizations. The objective of this study is to examine the impact of the corporatization process on the financial performance of SOEs. From the Financial Post 500, we selected the largest SOEs in Canada. For each firm, the critical year of the mandate revision has been set as the beginning of the corporatization period. We covered the years between 1976 and 1996. The performance is measured from a multi‐criteria approach including measures of profitability and productivity. The results suggest that the financial performance of SOEs improves significantly when firms are corporatized. Therefore, the main difference in the financial performance is caused by the difference in the objectives of the firm, not the property or some dubious political activities.Keywords
This publication has 23 references indexed in Scilit:
- Determinants of Performance Improvements in Privatized Firms: The Role of Restructuring and Corporate GovernanceSSRN Electronic Journal, 2000
- The impact on technical efficiency of the UK privatization programmeApplied Economics, 1997
- Privatization and Agency Status: Identifying the Critical Factors for Performance ImprovementBritish Journal of Management, 1995
- The Economics of Public Enterprise.The Economic Journal, 1992
- A PUBLIC MANAGEMENT FOR ALL SEASONS?Public Administration, 1991
- ORGANIZATIONAL STATUS A PERFORMANCE: SUMMARY OF THE FINDINGSPublic Administration, 1991
- CORPORATISATION AND ASSET VALUATION FOR A GOVERNMENT CORPORATIONFinancial Accountability & Management, 1990
- CORPORATISATION AND ASSET VALUATION FOR A GOVERNMENT CORPORATIONFinancial Accountability & Management, 1990
- State Capitalism: Public Enterprise in CanadaCanadian Public Policy, 1988
- Government in BusinessCanadian Public Policy, 1982