Public enterprises – An overview of legal definition and economic efficiency

Abstract

Public owned enterprises are usually the state foundations (public), which aim is to offer 
products and/or services with vital importance (essential) for a certain community. 
Realizing these goals on the market secures a monopoly position respectively privileges 
by enabling also the support of the authorities, and thus they become subject to public 
regulation with functions and economic activity in the public interest. The most 
important characteristic of public enterprises, unlike other forms of enterprise, they are 
enterprises of production and distribution of "essential goods", as well as exercising 
function in "public interest". The scientific interest, from the theoretical view, should 
have a focus on a deeper analysis of the identification of legal and economic differences 
between the notion and legal nature of the state and public enterprise. Although often 
in literature and practise the terms “state” and “public” enterprises are considered 
synonyms this is wrong. Despite the impacts deriving from historical economic law for 
the development and transformation of these enterprises, the public enterprise is a type 
of state enterprise, but distinct both in the formal and legal terms as well as in the socioeconomic aspect. Therefore, the content of the legislation, the treatment and the 
evaluation of owner, the public property, the exclusivity, the property transfer rights, the 
participation opportunities of the private capital, the right to issue shares, etc.. are the 
terminologies of essential content which not only which point the characteristics of 
these enterprises but also make the difference.
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