State-Owned Enterprises as Global Competitors

A Challenge or an Opportunity?

image of State-Owned Enterprises as Global Competitors

An estimated 22% of the world’s largest firms are now effectively under state control, this is the highest percentage in decades. These firms are likely to remain a prominent feature of the global marketplace in the near future. The upsurge of state-owned enterprises (SOEs) as global competitors has given rise to concerns related to a level playing field.  Some business competitors and observers claim that preferential treatment granted by governments to SOEs in return for public policy obligations carried out at home can give SOEs a competitive edge in their foreign expansion. The OECD has taken a multidisciplinary approach, looking at the issue from the competition, investment, corporate governance and trade policy perspectives.  The report aims to sort fact from fiction, and develop a stronger understanding, based on empirical evidence, on how to address growing policy concerns with regard to SOE internationalisation. The report concludes that although there is no clear evidence of systematic abusive behaviour by SOE investors, frictions need to be addressed, in view of keeping the global economy open to trade and investment.



State-owned enterprises as global competitors

This chapter describes the main issues and definitions covered by the report. It provides an empirical overview, based on original OECD analysis, of the share of state-owned enterprises (SOEs) in the global economy, their geographical and sectorial concentration, and their value among the world's largest firms. The data points to a marked rise in the share of SOEs as global competitors, and as such discusses how the international expansion of SOEs has triggered concerns regarding their competitive situation. It compares perceptions of concerns, based on original survey data, across business, industry and regulation. Finally, the chapter zooms in on the steel sector, with an overview of recent analysis of steel markets, the role of SOEs in steel production and their financial performance.


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