MENA Enterprise Survey Report Working Papers: Volume 7 - Management practices and the partial government ownership of firms in the Middle East and North Africa

Description

Well-managed firms are more productive, have higher operating profits, are more outward oriented and invest more in research and development. But company ownership also plays a role. Evidence from the Enterprise Surveys points to a negative relationship between partial government ownership and management practices in the Middle East and North Africa, where there is a high ratio of state-owned firms and where political connections play an important role in business management.

To improve managerial practices, firms in the region must first disentangle themselves from government ownership. Management training and consultancy hold promise, but as long as governments distort incentives in the region, these cannot be fully effective.

The Enterprise Surveys, conducted by the EIB, EBRD and the World Bank, provide insight into what lies beneath the region’s relatively slow growth, with a focus on the reasons for stagnating productivity and inadequate accumulation of human and physical capital in the private sector. This is the seventh of nine working papers supporting the full report: Unlocking sustainable growth in the Middle East and North Africa private sector.