Managing Fiscal Risks from The State-Owned Enterprises by Mixed Ownership Structure: Case of Mongolia
DOI:
https://doi.org/10.69588/mjer.v29i18.4261Keywords:
Public finance, Fiscal Risk Management, Government Debt, State-Owned Enterprises, Mixed ownership, Privatization, Stock marketAbstract
This study analyzes the fiscal risks posed by state-owned enterprises (SOEs) in Mongolia and evaluates the potential of mixed ownership structures, achieved through partial privatization via stock markets, to mitigate these risks. The research hypothesizes that mixed-ownership enhances SOE profitability, governance, and transparency, thereby improving operational efficiency, reducing fiscal vulnerabilities, and strengthening public finances.
Empirical findings validate that mixed-ownership reforms can alleviate fiscal risks by optimizing SOE financial performance and distributing risk among private stakeholders. However, structural challenges such as an underdeveloped stock market, weak governance, and persistent government control over privatized entities limit the effectiveness of these reforms.
The paper argues that while mixed ownership strategies hold potential, their success in Mongolia requires robust governance frameworks and improved stock market prerequisites. The findings contribute to the literature on fiscal risk management and SOE reforms in resource-dependent developing economies, offering actionable insights for policymakers and a framework for sustainable public finance strategies.
JEL codes: L32, H63, H83
Downloads
253
References
Bajo, E., Bigelli, M., & Hillier, D. (2018). Governance spillovers in public sector restructuring: Evidence from privatizations. Journal of Corporate Finance, 50, 319-338.
Bova, E., Ruiz-Arranz, M., Toscani, F. G., & Ture, E. (2016). The fiscal costs of contingent liabilities: A new dataset. IMF Working Paper No. 16/14. International Monetary Fund. https://doi.org/10.5089/9781513510504.001
Cebotari, A. (2008). Contingent liabilities: Issues and practice. IMF Working Paper No. 08/245. International Monetary Fund. https://doi.org/10.5089/9781451871020.001
Gupta, N. (2005). Partial privatization and firm performance. Journal of Finance, 60(2), 987-1015. IMF. (2020). Fiscal monitor: Policies for the recovery. International Monetary Fund. https://doi.org/10.1111/j.1540-6261.2005.00753.x
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3(4), 305-360. https://doi.org/10.1016/0304-405X(76)90026-X
Megginson, W. L., & Netter, J. M. (2001). From state to market: A survey of empirical studies on privatization. Journal of Economic Literature, 39(2), 321-389. https://doi.org/10.1257/jel.39.2.321
North, D. C. (1990). Institutions, institutional change and economic performance. Cambridge University Press. https://doi.org/10.1017/CBO9780511808678
OECD. (2018). State-owned enterprises and the guiding principles on business and human rights. OECD Publishing.
Peng, M. W., Bruton, G. D., Stan, C. V., & Huang, Y. (2016). Theories of the (state‐owned) firm. Asia Pacific Journal of Management, 33(2), 293-317. https://doi.org/10.1007/s10490-016-9462-3
Shirley, M. M., & Walsh, P. (2000). Public vs. private ownership: The current state of the debate. World Bank Policy Research Working Paper No. 2420. https://doi.org/10.1596/1813-9450-2420
Spence, M. (1973). Job market signaling. The Quarterly Journal of Economics, 87(3), 355-374. https://doi.org/10.2307/1882010
Stiglitz, J. E. (2000). The contributions of the economics of information to twentieth century economics. The Quarterly Journal of Economics, 115(4), 1441-1478. https://doi.org/10.1162/003355300555015
Sun, Q., & Tong, W. H. S. (2003). China share issue privatization: The extent of its success. Journal of Financial Economics, 70(2), 183-222. https://doi.org/10.1016/S0304-405X(03)00146-7
World Bank. (2021). Managing fiscal risks from state-owned enterprises. Washington, DC: World Bank Group.
Zhang, Y. (2021). Ownership reforms and enterprise transformation in China: A mixed-ownership perspective. China Economic Review, 70, 101689. https://doi.org/10.1016/j.chieco.2021.101689
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Batpurev Ayushuren, Zhuang Xuying, Batsukh Tserendorj
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Copyright on any research article in the Mongolian Geoscientist is retained by the author(s).
The authors grant the Mongolian Journal of Economic Review a license to publish the article and identify itself as the original publisher.
Articles in the Mongolian Journal of Economic Review are Open Access articles published under a Creative Commons ATTRIBUTION-NONCOMMERCIAL-NODERIVS 4.0 INTERNATIONAL - CC BY-NC-ND 4.0.
This license permits use, distribution and reproduction in any medium, provided the original work is properly cited.
