# 1. Introduction

State-owned enterprises (SOEs) play a large and increasing role in the global economy. According to the International Monetary Fund (IMF),<sup>1</sup> global assets of SOEs more than tripled between 2000 and 2018, from US$13 trillion to US$45 trillion, about half of global GDP. SOEs are also large employers in many countries. For instance, despite several decades of privatization, SOEs still account for half of all public employment in EBRD countries (EBDR, 2021). An analysis of the role of firms with state participation across countries requires firm-level data. Aggregate data on SOEs can provide a fair overview of the relative size of the state footprint in terms of GDP or total employment. However, such aggregate figures provide overall estimates that are not precise enough for meaningful cross-country comparisons, due to differences in state ownership definitions and aggregation considerations. Hence, researchers analyzing government public provision of goods and services through SOEs, and the effect of SOEs on productivity, growth, and competitiveness, require access to firm-level data using a consistent definition of SOEs to allow for better cross-country comparisons. Firm-level data are also essential to analyze SOEs’ economic implications, design SOE reform plans, and assess the adjustment costs and mitigation measures considering the interrelations of SOEs across multiple sectors in the economy. Firm-level data also allows for more targeted programs, for example regarding divestiture measures, management arrangements, corporate governance, and regulatory reforms. However, reform strategies are often constrained or delayed by the lack of readily available information.

This paper describes a novel methodology to develop a harmonized cross-country firm-level database of state-owned enterprises, the Businesses of the State (BOS) database, which maps the state footprint within the corporate sector and across economic activities.<sup>2</sup> The database is based on a uniform definition, a global data source, and a standardized protocol to include supplementary information from complementary sources beyond ORBIS (e.g., business registries, central depositories, central oversight bodies, MoF) (See Annex 3). This database is more comprehensive when compared to former or parallel efforts since it covers over 80 countries doubling the size of countries compared to the OECD coverage or quadruples the sample size of the IMF databases, focuses on developing countries, expands on the firmlevel indicators beyond financial performance, covers all relevant economic sectors including natural monopolies and financial sector that are excluded in the IMF or EU databases, and does not trim the sample by any threshold on size (See Annex 1). The global BOS database provides unique country and firm-level information for research and policy interventions on areas such as the presence of SOEs by economic sector, the economic performance of SOEs, government ownership structures, and governance.

The main contributions of the global BOS database go beyond existing efforts expanding the coverage. First, the global BOS database builds on a harmonized definition that can be applied systematically across countries and separate from country-specific definitions that hinder comparability. Second, it not only covers direct linkages between a company and a government, but also identifies and spells out all indirect ownership linkages allowing to trace state participation throughout multiple levels (e.g., subsidiaries of subsidiaries of companies with state participation). Third, it allows to trace state participation in domestic markets but also across borders.<sup>3</sup> Fourth, the database captures the ability of the state to influence markets not only through majority owned companies, but also by lowering the

> 1 https://blogs.imf.org/2020/05/07/state-owned-enterprises-in-the-time-of-covid-19/ (Gaspar, 2020).

> 2 The database not only captures the conventional and traditional SOEs that are often linked to majority control of the state, but also expands the spectrum of entities in which the state can have a significant ability to influence through other businesses of the state.

> 3 The ownership trees allow to identify the foreign based SOEs linked to a specific government (e.g., Angolan SOEs operating across borders). However, given the limitations regarding the data validation of the financial information of foreign based SOEs as well as data collection on the governance indicators, only few indicators of these companies are included in the global BOS database such as the company identification, company name, and countries of operation.

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