Corporate Governance. State Owned Enterprises презентация

State Owned Enterprises (SOE): When and Where SOEs Emerge?
In countries with market failure
In emerging economies shifting to market economy
Justified by better allocation of resources in places where there are no signs of healthy competition
In other developed countries SOEs exist to provide the most vital to state services: road and bridge construction/maintenance, education, national security, energy/gas, airlines, etc.
SOEs traditionally are criticized for a number of reasons:

The Case against the SOEs
SOEs traditionally are criticized for a number of reasons:
SOEs use capital less efficiently
SOEs absorb talent and capital
SOEs work only when directed by a competent state
SOEs produce cronyism as the favor connected insiders rather than innovative outsiders
Subsidies and not collected dividends create bigger cash flows making the agents/CEO’s slack from owners and consume more perks.
SOEs pursue double bottom line at the expense of minor shareholders
Impact on domestic and global trade

The Case for SOEs
Per Pargendler et al. the mixed SOEs provide for a better platform for investments where markets fail.
They argue that combination of government regulation from the standpoint of SOE owner and private ownership go well together complementing each other and provide for more efficiency

The Case for SOEs
Advantages:
Private ownership in SOEs opens up for more transparency and monitoring, as listed companies need to publish financial statements
States are able to pursue specific public policies via SOEs
Stock prices of listed SOEs also provide for more information on company’s and CEOs performance.
Private capital injected into SOEs provides an opportunity for investing in large and risky projects
Private investors also enjoy privileges provided to the SOEs
Prices ex ante are discounted
Governance and legislation mitigate the agency costs

Controversies about SOEs
Debate on short-termism v long-term horizons
Which ones would be long-term oriented, listed or non listed SOEs?
Per scholars, the ultimate owners of the SOEs are the citizenry of the state. Do you agree? Then what is wrong with the model?

Comparison of Pemex, Petrobras and Statoil
Which of the three have better governance structure?
What are the criteria to judge?
Which one has the biggest return?
Which of those have better firm valuation?
Does politics play role in SOEs?
Is political interference a positive or negative element?

SOEs in China
What is the ownership structure in most of the Chinese business groups?
How did that develop into current situation?
What is the role of the SASAC?
What is the main criticism of the authors Milhaupt and Zheng?
Dividends
Exec Compensation
Failure to implement public policies
Influences on corporations it owns via regualtion

Privately Owned Enterprises (POEs) in China
Incumbents vs. Captors
How would you describe the state capture of POEs?
What are the main criteria for capturing?
What are the ways of capture?
Connections (personal, professional, etc.)
Corruption
Economic growth (!!!!)
What is the role of the local leaders in economy there? Would it be appropriate for Armenia?

SOEs in China and around the Globe
What were the reasons for the short-lived success?
Did the Chinese leadership’s anti-corruption reform affect Chinese outbound investments? Why?
Why do the reporters criticize the SOEs and how they explain the recent falling out of rankings of the SOEs that had topped the rankings a decade ago?
Do you agree that the SOEs should go public? How much? In all industries?