Government-owned Enterprises and Sustainability: Review and Research Agenda

Government-owned enterprises (GOEs) play a promising role in sustainability transitions because of their presence in energy-producing and energy-intensive sectors. However, empirical insights into the possible contributions and limitations of GOEs towards the many facets of sustainability transitions are scattered. This study is the first to provide a comprehensive review on the roles of GOEs in sustainability transitions, and to identify important knowledge gaps. We conduct a hybrid review on GOEs and sustainability transitions, and synthesize literatures from economics, organizational studies, sustainability studies, geography, innovation, and governance/law. We first present an overview of the geographical and sectoral coverage of the literature and identify five different ways in which sustainability outcomes of GOEs are measured. We then present an analytical framework that identifies firm-internal, government-related and contextual factors that influence sustainability outcomes of GOEs. Internal factors include the objective function of firms as well as firm efficiency. Political connections, sectoral competition and relationships with citizens also influence sustainability outcomes of GOEs. A subset of studies that provides direct comparisons between sustainability outcomes of private and government-owned enterprises is reviewed. The current literature contains important lacunae, including the role of GOEs in long-term sustainability transformations, the influence of governance structures, and the relation to green industrial policy. Key policy take-aways are provided to enhance the role of GOEs in sustainability transitions.