Original Research

Corporate governance and performance of state-owned enterprises in a least developed economy

Elias Kaunda, Theuns Pelser
South African Journal of Business Management | Vol 54, No 1 | a3827 | DOI: https://doi.org/10.4102/sajbm.v54i1.3827 | © 2023 Elias Kaunda, Theuns Pelser | This work is licensed under CC Attribution 4.0
Submitted: 24 November 2022 | Published: 29 September 2023

About the author(s)

Elias Kaunda, Commercial Department, Malawi Telecommunications Limited, Blantyre, Malawi
Theuns Pelser, Toyota Wessels Institute for Manufacturing Studies, Durban, South Africa


Purpose: The main objective of the study was to investigate how corporate governance affects the performance of state-owned enterprises (SOEs) in a least developed economy.

Design/methodology/approach: Both primary and secondary data from nine state-owned companies that operated between 2001 and 2016 were analysed in the study. The investigation used a quantitative methodology. Fixed effects, random effects and generalised method of moments (GMM) estimations were used to conduct regression analysis.

Findings/results: The findings show that corporate governance characteristics affect SOE performance in a least developed economy. The performance of SOEs is influenced favourably by board structures, director tenure, reduced government ownership and leverage. Conversely, increased state ownership leads to subpar performance. The study also reveals that the presence of civil servants and directors with political affiliations in government-controlled companies has a negative effect on enterprise value.

Practical implications: The use of multiple case studies to investigate SOEs in their natural setting has given some insights for both professional managers and policymakers interested in developing corporate governance frameworks to improve SOEs value in least developed economies, particularly in sub-Saharan Africa, even though the results are limited in terms of statistical generalisation because the study was based on a single country.

Originality/value: The study fills a gap in the literature about how SOE performance is affected by corporate governance in least developed nations, where such research is underdeveloped.


corporate governance; ownership structure; board attributes; capital structure; disclosure; state-owned enterprises; performance

JEL Codes

G34: Mergers • Acquisitions • Restructuring • Corporate Governance; L25: Firm Performance: Size, Diversification, and Scope; M14: Corporate Culture • Diversity • Social Responsibility

Sustainable Development Goal

Goal 9: Industry, innovation and infrastructure


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