The Determinants of Financial Performance of South African State-Owned Entities

Several state-owned enterprises (SOEs) have severally faced imminent collapse, resulting in various support from the government. This has increased debt level of government and SOEs. The study examined factors that influence financial performance South African used a quantitative methodology secondary data 33 SOEs 1995 to 2017. were analysed using multiple regression model GMM estimation technique. study's conclusions show statistically significant inverse relationship between capital structure performance. evidence further showed intervention assistance, such as grants, funds, rebates, subsidies, contributed poor association suggests continues worsen despite support, which is quite concerning. results demonstrate not sound choice for developing since it makes management more dependent on meet operational needs seize expansion possibilities. Additionally, use stresses finances due rise guarantees. concludes that, contrary agency theory, leverage does enhance SOEs' performance, suggesting they should be careful when selecting their structure. Finally, SOEs’ being hampered by support. findings several policy implications SOEs.