Formal and real ownership structure of the Polish economy: state-owned versus state-controlled enterprises

Abstract

This article analyses the difference between the state’s formal and real shares in the Polish economy. We identify two basic types of corporate control exercised by the state over enterprises through ownership (in the case of majority ownership) and non-ownership tools (in the case of minority ownership). Consequently, we distinguish between two types of state enterprises: state-owned enterprises (SOEs) and state-controlled enterprises (SCEs). In post-communist economies, SCEs mainly originate from so-called reluctant privatisation, in which the transfer of ownership rights takes place without the appropriate transfer of control rights. We discuss the tools of non-ownership control used by the state. Our estimates of the real share of state enterprises in the Polish economy (which include both SOEs and SCEs) show that it is almost two times higher than the formal share (only SOEs). The share of state enterprises is also highest in the group of Poland’s largest and most important firms. We conclude that the real importance of state enterprises in the Polish economy is much higher than might be expected if only the formal share of state ownership is taken into account.

Keywords:

• State-owned enterprises
• state-controlled enterprises
• reluctant privatisation
• ownership structure
• post-communist economies
• Polish economy

JEL classification:

• L32
• L33
• P26
• G3

Notes

1. The EBRD provided estimates of the private sector’s share of GDP until 2010.

2. For more on the diverse goals of the SOEs, see Chang (2007, p. 22).

3. http://www.ebrd.com/downloads/research/economics/macrodata/sci.xls [Accessed 5 May 2015].

4. http://nadzor.msp.gov.pl/nad/import/5,dok.html [Accessed 10 April 2015].

5. The figures are drawn from the list of the 1500 largest Polish enterprises (Top 1500), compiled by the authors of this paper on the basis of the list of the 2000 largest Polish enterprises compiled by the daily Rzeczpospolita (Lista, 2013), verified and supplemented with data from other sources. All the figures refer to non-financial enterprises.

6. Bortolotti and Faccio (2009) observe that ‘in civil law countries, governments tend to retain large ownership positions, whereas in common law countries they typically use golden shares’.

7. http://nadzor.msp.gov.pl/nad/import/1,dok.html [Accessed 10 April 2015].

8. GDP is calculated as GAV with taxes on products added and subsidies extracted.

9. Among these 25 largest Polish enterprises, there are also a few entities owned by global corporations: Volkswagen, Fiat, Orange, British Petroleum, Metro, Tesco.