The Value Of The State-Owned Enterprises In Indonesia: A Case Study Of Privatization

Abstract

This research aims to test the impact of the ownership structure toward the performance of the State-Owned Enterprises (SOEs). It examines the relationship between the performance of the SOEs and the market value. The study involves 13 SOEs listed at the Jakarta Stock Exchange. Of the 13 SOEs, 9 were selected as samples. The performance of the SOEs is measured by means of the EVA (Economic Value Added) indicator and the market value by the MVA (Market Value Added) indicator. The result of the study reveals that the ownership structure does not have an impact on the performance of the SOEs, either partially or simultaneously. To a smaller degree, the study also indicates that there is a relationship between the EVA and the MVA. The implication of this study is that the privatization of the SOEs should not fully be used to help with the state budget deficit. That is, the majority of the funds should be allocated for the purpose of developing or expanding the SOEs themselves so that they can perform optimally for the sake of society. Furthermore, the SOEs should be well-managed if they would like to obtain good responses from the market.