|Subnational (=1 if municipal)|-0.565***|-0.565***|
|---|---|---|
||-0.027|-0.068|
|Constant|4.393***|4.393***|
||-0.059|-0.239|
|**Observations**|**29,712**|**29,712**|
|R-squared|0.137|0.137|
|Sector FE|Yes|Yes|
|Cluster|No|Yes: Sector 2d|
|Robust standard errors in parentheses|||

*** p<0.01, ** p<0.05, * p<0.1

# 7. Conclusion

This paper describes a novel methodology for the construction of a global data set of state-owned enterprises, the Global Business of the State (BOS) database. The BOS database is more comprehensive than existing efforts to date since the BOS database (i) builds on a harmonized definition and expands the threshold beyond majority owned companies allowing for a more comprehensive and yet flexible approach, (ii) identifies and unveils both direct and indirect linkages of companies including presence at the national and subnational level as well as across borders, (iii) includes all type of sectors including natural monopoly sectors, which are relevant for assessing the state footprint in the markets, (iv) adjusts for the measurement error in ORBIS through the extensive and systematic use of supplementary databases and country team validation that allows to identify firms that are considered as private in ORBIS, (v) minimizes the omission error including companies that are operating in markets with state participation with the support of complementary sources and government counterparts, but are not captured in ORBIS; (vi) includes non-corporatized companies that are aligned to our proposed definition, but for which the shareholder information in ORBIS is incomplete, and (vii) includes countries with fewer than 30 firms and does not restrict the companies to any threshold in assets. As a result, the Global BOS database includes data on more than 48,000 firms across 80 countries, whereas the second largest database by the number of SOEs, the EBRD database (Borkovic & Tabak, 2020), covers 17,600 firms in 25 countries.

To construct the database, we use the ORBIS data set provided by Bureau van Dijk. The ORBIS database provides the ownership structures between shareholders and their direct subsidiaries and firms’ financial data. However, low data coverage and outdated ownership structures found in the ORBIS database restrict researchers’ ability to use it directly. Moreover, the lack of a uniform SOE definition restricts the ability to identify SOEs across countries to perform cross-country comparisons. Given the data caveats of ORBIS, we complement the information of this database with different data sources including WBG project Databases, external BOS databases, and country-specific firm-level data sets.

Our methodological approach allowed us to identify four times more companies with state participation across 80 countries. It also improved the coverage of financial information by 4.4 times in employment reaching more than 11 million workers, and 3.7 times more revenues surpassing USD 1.5 billion, to provide a more comprehensive measure of the real state footprint in the markets. The Global BOS database sheds light on the very diverse set of sectors in which the state participates as a market player, in many cases without a clear rationale for state’s direct intervention in the form of an SOE. In many countries, SOEs are 33