**_Table 2. Summary statistics: BOSs vis-à-vis POEs (median representative firm) in sample by country 2011-2020_**

|**Country**<br>**(ISO)**|**Numb**<br>**firm**<br>|**er of**<br>**s**<br>|**Ag**<br>**(yea**<br>|**e**<br>**rs)**<br>|**Emplo**<br>|**yment**<br>|**Profit m**<br>|**argin**<br>|**La**<br>**Produ**<br>|**bor**<br>**ctivity ***<br>|**Cur**<br>**rat**<br>|**rent**<br>**io**<br>|**Solv**<br>**Rati**<br>|**ency**<br>**o(%)**<br>|**RO**<br>|**A**<br>|**RO**<br>|**E**<br>|
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
||**POE**|**BOS**|**POE**|**BOS**|**POE**|**BOS**|**POE**|**BOS**|**POE**|**BOS**|**POE**|**BOS**|**POE**|**BOS**|**POE**|**BOS**|**POE**|**BOS**|
|**BA**|6,647|271|14|17|21|50|4.3|0.9|10.6|9.7|1.3|1.3|47.5|55.7|3.3|0.2|10.2|0.5|
|**BG**|63,363|344|8|16|18|55|4.5|1.4|9.8|9.3|1.8|1.7|55.4|71.3|3.7|0.7|13.4|1.3|
|**EE**|63,343|124|5|16|18|25|11.5|5.2|10.8|10.9|2.2|1.6|92.2|73.8|1.3|2.0|3.1|3.7|
|**ES**|288,776|1,324|13|17|18|43|2.9|2.0|11.6|11.6|1.4|1.5|43.3|49.8|0.8|0.6|3.0|1.6|
|**HR**|32,309|499|9|14|18|38|4.2|0.9|10.9|10.5|1.3|0.9|34.1|39.9|0.4|0.4|5.7|1.6|
|**IT**|401,118|3,448|10|13|17|44|3.8|2.7|11.9|12.1|1.4|1.3|25.6|29.2|0.5|0.5|3.2|2.4|
|**LT**|14,549|95|12|21|20|82|3.3|3.7|10.5|10.4|1.7|1.8|50.7|77.2|5.0|1.4|12.2|2.3|
|**LV**|19,352|271|8|21|19|46|3.5|0.6|10.4|10.1|1.2|1.3|44.5|43.5|0.7|0.2|8.6|0.5|
|**MK**|10,018|126|11|18|19|65|4.5|2.1|10.2|9.5|1.4|1.6|62.1|63.8|2.2|0.5|6.2|0.9|
|**PL**|128,157|2,703|8|16|41|94|3.6|2.2|11.3|10.9|1.5|1.3|51.8|65.3|3.4|0.8|11.6|1.5|
|**PT**|64,708|406|12|15|18|51|3.3|3.7|11.1|11.5|1.6|1.3|36.1|44.0|1.4|0.8|5.6|3.1|
|**RO**|213,884|762|7|10|19|58|11.2|2.0|10.1|9.5|1.2|1.9|41.3|49.6|0.7|1.4|17.8|4.8|
|**RS**|33,788|594|10|18|19|78|3.4|2.0|10.5|9.6|1.1|1.0|35.7|54.6|2.1|0.4|12.3|1.3|
|**RU**|453,193|13,369|7|14|25|49|4.4|1.7|9.5|9.4|1.4|1.3|39.3|56.2|3.5|0.6|19.7|2.3|
|**SI**|50,483|364|7|22|18|62|9.8|1.5|11.5|11.4|2.0|1.4|65.1|48.7|4.9|1.2|14.6|3.0|
|**UA**|125,312|2,637|11|15|22|41|2.8|0.4|9.4|8.5|1.2|1.2|54.5|75.2|2.4|0.2|10.4|0.5|

_Note: *Labor productivity is measured as the logarithm of operating revenues per worker. Source: Author’s calculations using WB BOS database and ORBIS._ Some authors argue that firms owned by the state are not always operating under a profitmaximizing behavior as they may pursue public mandates (Matuszak & Kabaciński, 2021). Hence, some performance differentials are expected (Lawson, 1994) (Bozec, Breton, & Coté, 2002). Previous studies have tried to account for commercial and non-commercial mandates assigned to SOEs. However, there are two caveats on former attempts to do so.

First, most studies are country-specific hindering external validity and comparability of the findings. Second, the differentiation of the type of sectors to determine whether state-owned firms have commercial and non-commercial functions has been based on profitability, sector-specific regulations, and president announcements (Bozec, Breton, & Coté, 2002). These approaches might raise potential endogeneity issues since the distinction between commercial and non-commercial activities would be linked to underlying performance issues rather than the economic nature of the sector where the state operates. For example, a loss-making BOS could be resulting from inadequate management or insufficient market incentives even when performing fully commercial functions such as manufacturing of textiles. Similarly, using policy regulations and presidential interventions to differentiate between commercial and non-commercial functions could be linked to other interrelated policy objectives that are not necesarilly related to the technology or economic characteristics of a specific sector.<sup>12</sup>

> 12 Some companies could be not-profit maximizing as per the legal framework, but still operate under management contracts that set profit targets. In these cases, it is not clear whether not-profit companies could be categorized as non-commercial given their low performance. Hence, some endogeneity issues might emerge. As indicated by (Megginson & Netter, 2001), assessment on performance might itself be linked to the system that includes both political and performance goals.

8