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May 2012

Financial performance of state owned enterprises in emerging economies

This project examined the financial performance of Pakistan Railways (PR) - an important state-owned enterprise (SOE) in Pakistan - to identify the causes of its poor financial performance. Using a case study approach helped the researchers to analyse the issue by bridging the gap between theory and practice.

The primary objective of this research project is to analyse the financial performance of SOEs in emerging economies, with specific reference to PR. The aim is to highlight those factors that have contributed to the poor financial performance of PR. The research study also intends to identify shortcomings in the financial management systems of PR and suggest measures for improvement. Emerging economies with the potential for rapid economic growth, but with volatile economic and political systems, have many common governance issues. The findings of this research project may also help practitioners and researchers to identify possible causes and solutions to the problems of similar SOEs in other emerging countries.

An SOE must strive to rationalise its costs in the short run and improve its profits or surpluses in the long run.

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Financial performance of state owned enterprises in emerging economies