This book analyzes state-owned enterprises (SOEs), which are still significant players in many Asian economies. They provide essential public services, build and operate key infrastructure, and are often reservoirs of public employment. Their characteristics and inherent competitive advantages as publicly owned enterprises allow them to play these critical roles. Their weaknesses in governance and inefficiencies in incentive structures, however, also often lead to poor performance. SOEs must be efficient, transparent, and accountable to level the playing field for private companies, secure the growth of a vibrant private sector, and achieve sustained and inclusive economic growth. This book analyzes the reform of SOEs in Asia, the results of which are mixed. The volume concludes that some key conditions generally need to be met for SOE reforms to be successful: national bureaucracies must have the capacity to implement the reforms, and adverse impacts on international trade and investment must be avoided.

State-owned enterprises (SOEs) play significant roles in developing economies in Asia and SOE performance remains crucial for economy-wide productivity and growth. This book looks at SOEs in Azerbaijan, Indonesia, Kazakhstan, the People's Republic of China, and Viet Nam, which together present a panoramic view of SOEs in the region. It also presents insights from the Republic of Korea on the evolving role of the public sector in various stages of development. It explores corporate governance challenges and how governments could reform SOEs to make them efficient drivers of the long-term productivity-induced growth essential to Asia's transition to high-income status.

Strategy 2030 underscores the commitment of the Asian Development Bank (ADB) to support state-owned enterprise (SOE) reform in developing member countries (DMCs). This guidance note provides an overview of SOEs and explains the significance of reforms in implementing ADB’s corporate strategy for its operations in DMCs. It discusses the requirements for SOE reform and provides guidance on challenges that need to be addressed and areas to focus on relative to different sector needs. Designed to help ADB staff in their work with SOEs, this guidance note is also a useful resource for officials from DMCs, and SOE board and management members.

Prior to the COVID-19 shock, the key challenge facing policymakers in the Middle East, North Africa, and Central Asia region was how to generate strong, sustainable, job-rich, inclusive growth. Post-COVID-19, this challenge has only grown given the additional reduction in fiscal space due to the crisis and the increased need to support the recovery. The sizable state-owned enterprise (SOE) footprint in the region, together with its cost to the government, call for revisiting the SOE sector to help open fiscal space and look for growth opportunities.

We document that publicly listed Chinese state-owned enterprises (SOEs) are less productive and profitable than publicly listed firms in which the state has no ownership stake. In particular, Chinese listed SOEs are more capital intensive and have a lower average product of capital than non-SOEs. These productivity differences increased between 2002 and 2009, and remain sizeable in 2019. Using a heterogeneous firm model of resource misallocation, we find that there are large potential productivity gains from reforms which could equalize the marginal products of listed SOEs and listed non-SOEs.

This book is intended for policy-makers, academics and students of development studies, area studies, political economy, geography and political science. Three of the best global performers in terms of economic growth are authoritarian states led by communist parties. The ‘socialist market economy’ model employed in China, Vietnam and Laos performs better than the economic systems in countries at a similar level of income per capita on a wide range of development indicators, yet market reforms and governance failures have led to highly unequal societies and significant environmental problems. This book presents the first comparative study of development in these three countries. Written by country experts and scholars of development studies, it explores the ongoing quest for market versus state within their model, and the coherence of their development. Chapter 5 is available open access under a Creative Commons Attribution 4.0 International License via link.springer.com.