[{"data":1,"prerenderedAt":-1},["ShallowReactive",2],{"doc-detail-113056-en":3,"doc-seo-113056-105":29,"detail-sidebar-cat-0-en-105":90},{"code":4,"msg":5,"data":6},0,"success",{"doc_id":7,"user_id":8,"nickname":9,"user_avatar":10,"doc_module":4,"category_id":11,"category_name":12,"doc_title":13,"doc_description":14,"doc_content":15,"file_id":16,"file_url":17,"file_type":18,"file_size":19,"view_count":4,"is_deleted":4,"is_public":20,"is_downloadable":20,"audit_status":20,"page_count":21,"language":22,"language_code":23,"site_id":24,"html_lang":23,"table_of_contents":25,"faqs":26,"seo_title":13,"seo_description":14,"update_tm":27,"read_time":28},113056,1099513958762,"Logic","https://ap-avatar.wpscdn.com/avatar/1000023916a998db790?x-image-process=image/resize,m_fixed,w_180,h_180&k=1782109480056885918",8,"Research & Report","The Business of the State - State Businesses: Catalysts or Constraints?","State businesses compete with private firms in commercial activity but can also collaborate through joint ownership. This chapter evaluates economic efficiency of state-owned businesses in real-sector performance, comparing productivity, resource allocation, market concentration, and private investment dynamics over time. Using census data from Brazil, Ecuador, Romania, Türkiye, and Viet Nam and Orbis panel data for 14 European countries, it tests whether state presence catalyzes or constrains productivity growth and sector dynamism.","Public Disc losure Authorized  \n2. State Businesses: Catalysts or Constraints?  \nPub lic Disc losure Authorized  \nIntroduction  \nAs an active player in commercial activities, the state competes with private firms, but it also collaborates with the private sector when ownership is joint. This chapter focuses on the economic efficiency of businesses of the state (BOSs) in the real sector. Do they tend to be more, or less, productive than private firms? And what can state presence mean for sector dynamism and investment over time? This chapter examines census data from Brazil, Ecuador, Romania, Türkiye, and Viet Nam as well as panel data from Orbis for 14 European countries.1 The answers are at the heart of debates over when and where BOSs catalyze or constrain productivity growth and private investment.  \nState businesses may receive preferential treatment or not be held to the same efficiency standards as private firms. Having the state as full or partial owner could put a firm at an advantage if it receives preferential treatment from regulatory authorities or enjoys preferential access to finance or procurement contracts (IMF 2020; Shleifer and Vishny 1998; World Bank 1995, 2018) . BOSs could thus allocate resources away from their most productive uses and dampen innovation and growth. Most literature treats BOSs as homogeneous or looks at a single sector or country. This report is the first to test for these effects across countries, differentiating across types of BOSs and market structures (Dall’Olio et al. 2022a, 2022b) .  \nThree key patterns reinforce the importance of looking not just at the relative performance of firms by ownership but also at their impacts on the broader dynamics of state presence in a sector.  \n1. The performance of BOSs compared with that of private firms varies across different types of ownership and market structures. Minority-owned firms often perform better than firms with majority state ownership (Brazil, Viet Nam, and 14 European countries) . There is also some evidence suggesting that BOSs owned directly have lower sales growth than those owned indirectly. However, rather than sweeping conclusions, analysts should take into account the heterogeneous types of BOSs to understand their performance in specific countries of interest.  \n2. The presence of BOSs in a sector is associated with a significant misallocation of resources, greater market concentration, and lower rates of firm entry—these are the most significant and worrying effects of BOSs on market dynamism.  \n3. Despite the state’s justification for using BOSs to crowd in or catalyze private investment in competitive markets, there is no significant evidence of this effect in the countries analyzed here. This finding is true in aggregate for a sector and for the average rates of investment of private firms.  \nMany governments justify the creation of BOSs to address market failures and meet social mandates. However, the ability to deliver these benefits needs to be weighed against the fiscal costs and the adverse impacts on market dynamism and productivity growth. State ownership per se is not the only way to address market failures. The empirical evidence found in this report underlies the importance of reconsidering the state presence in competitive markets and addressing the concerns about governance and preferential treatment of BOSs that may come at the expense of market dynamism.  \nMixed Results of State Ownership on BOSs’ Performance  \nCharacteristics and Productivity Levels of BOSs versus Private Firms  \nAcross countries, BOSs are larger and employ more workers than private firms in the same two-digit sector. This finding is common in the literature and is true in all five countries with census data and in 14 European countries with panel data (IMF 2020; World Bank 1995) . The size premium tends to rise with the extent of state ownership and is most often highest in natural monopoly markets. In Brazil, BOSs in partially contesta","cbCaikKsfmubIuCm","https://ap.wps.com/l/cbCaikKsfmubIuCm","pdf",762507,1,20,"English","en",105,"# Introduction\n## Key patterns on performance and market dynamism\n# Mixed results on state ownership performance\n## Characteristics and productivity levels vs. private firms\n## Wage premiums and labor productivity","[{\"question\":\"How does the report assess the productivity of state businesses versus private firms?\",\"answer\":\"It compares state-owned businesses with private firms using census data from Brazil, Ecuador, Romania, Türkiye, and Viet Nam, and panel data from Orbis for 14 European countries.\"},{\"question\":\"What are the key worrying effects of state presence in a sector?\",\"answer\":\"State presence is linked to misallocation of resources, greater market concentration, and lower firm entry rates, which together reduce market dynamism.\"},{\"question\":\"Does the evidence support the idea that state presence crowds in private investment in competitive markets?\",\"answer\":\"No. The report finds no significant evidence that state businesses catalyze or crowd in private investment in the analyzed countries.\"}]",1784499493,50,{"code":4,"msg":30,"data":31},"ok",{"site_id":24,"language":23,"slug":32,"title":13,"keywords":33,"description":14,"schema_data":34,"social_meta":85,"head_meta":87,"extra_data":89,"updated_unix":27},"the-business-of-the-state-state-businesses-catalysts-or-constraints","",{"@graph":35,"@context":84},[36,53,67],{"@type":37,"itemListElement":38},"BreadcrumbList",[39,43,47,50],{"item":40,"name":41,"@type":42,"position":20},"https://docshare.wps.com","Home","ListItem",{"item":44,"name":45,"@type":42,"position":46},"https://docshare.wps.com/document/","Document",2,{"item":48,"name":12,"@type":42,"position":49},"https://docshare.wps.com/document/research-report/",3,{"item":51,"name":13,"@type":42,"position":52},"https://docshare.wps.com/document/the-business-of-the-state-state-businesses-catalysts-or-constraints/113056/",4,{"url":51,"name":13,"@type":54,"author":55,"headline":13,"publisher":57,"fileFormat":60,"inLanguage":23,"description":14,"dateModified":61,"datePublished":61,"encodingFormat":60,"isAccessibleForFree":62,"interactionStatistic":63},"DigitalDocument",{"name":9,"@type":56},"Person",{"url":40,"name":58,"@type":59},"DocShare","Organization","application/pdf","2026-07-19",true,{"@type":64,"interactionType":65,"userInteractionCount":4},"InteractionCounter",{"@type":66},"ViewAction",{"@type":68,"mainEntity":69},"FAQPage",[70,76,80],{"name":71,"@type":72,"acceptedAnswer":73},"How does the report assess the productivity of state businesses versus private firms?","Question",{"text":74,"@type":75},"It compares state-owned businesses with private firms using census data from Brazil, Ecuador, Romania, Türkiye, and Viet Nam, and panel data from Orbis for 14 European countries.","Answer",{"name":77,"@type":72,"acceptedAnswer":78},"What are the key worrying effects of state presence in a sector?",{"text":79,"@type":75},"State presence is linked to misallocation of resources, greater market concentration, and lower firm entry rates, which together reduce market dynamism.",{"name":81,"@type":72,"acceptedAnswer":82},"Does the evidence support the idea that state presence crowds in private investment in competitive markets?",{"text":83,"@type":75},"No. The report finds no significant evidence that state businesses catalyze or crowd in private investment in the analyzed countries.","https://schema.org",{"og:url":51,"og:type":86,"og:title":13,"og:site_name":58,"og:description":14},"article",{"robots":88,"canonical":51},"index,follow",{"doc_id":7,"site_id":24},{"code":4,"msg":5,"data":91},[92,96,100,104,109,113,118,121,125,128,132],{"id":20,"doc_module":4,"doc_module_name":45,"category_name":93,"show_sort_weight":94,"slug":95},"Story & Novel",90,"story-novel",{"id":46,"doc_module":4,"doc_module_name":45,"category_name":97,"show_sort_weight":98,"slug":99},"Literature",80,"literature",{"id":52,"doc_module":4,"doc_module_name":45,"category_name":101,"show_sort_weight":102,"slug":103},"Exam",70,"exam",{"id":105,"doc_module":4,"doc_module_name":45,"category_name":106,"show_sort_weight":107,"slug":108},5,"Comic",60,"comic",{"id":110,"doc_module":4,"doc_module_name":45,"category_name":111,"show_sort_weight":28,"slug":112},6,"Technology","technology",{"id":114,"doc_module":4,"doc_module_name":45,"category_name":115,"show_sort_weight":116,"slug":117},7,"Healthcare",40,"healthcare",{"id":11,"doc_module":4,"doc_module_name":45,"category_name":12,"show_sort_weight":119,"slug":120},30,"research-report",{"id":122,"doc_module":4,"doc_module_name":45,"category_name":123,"show_sort_weight":21,"slug":124},9,"Religion & Spirituality","religion-spirituality",{"id":21,"doc_module":4,"doc_module_name":45,"category_name":126,"show_sort_weight":21,"slug":127},"World Cup","world-cup",{"id":129,"doc_module":4,"doc_module_name":45,"category_name":130,"show_sort_weight":129,"slug":131},10,"Lifestyle","lifestyle",{"id":133,"doc_module":4,"doc_module_name":45,"category_name":134,"show_sort_weight":105,"slug":135},19,"General","general"]