The Current Situation and Problems of State-Owned Enterprises in Azerbaijan

Abstract

State-Owned Enterprises (SOEs) are identified as entities that the state possesses directly or indirectly, more precisely, if the government owns more than 50.01% of shares of the companies they are considered as the SOEs (Orbis and other databases). Approximately 10% of the largest companies in the world are owned by the states. In most cases, being a state-owned firm is more favorable as the company receives advantageous treatments by the state such as discounted funding, government-supported guarantees, directly provided subsidies, favorable regulatory treatment and also being exempted from antitrust enforcement as well as insolvency regulations. In the domestic level, there can be justifications for favorable treatments by the government such as increasing economic growth, supply of public goods and services and fixing up the market fails. However, if it outstretches its boundaries then there will be a breach of market principles.