Managing Fiscal Risks from The State-Owned Enterprises by Mixed Ownership Structure: The Case of Mongolia

This study analyzes the fiscal risks posed by state-owned enterprises (SOEs) in Mongolia and evaluates the potential of mixed ownership structures, achieved through partial privatization via stock markets, to mitigate these risks. The research hypothesizes that mixed-ownership enhances SOE profitability, governance, and transparency, thereby improving operational efficiency, reducing fiscal vulnerabilities, and strengthening public finances. Empirical findings validate that mixed-ownership reforms can alleviate fiscal risks by optimizing SOE financial performance and distributing risk among private stakeholders. However, structural challenges such as an underdeveloped stock market, weak governance, and persistent government control over privatized entities limit the effectiveness of these reforms. The paper argues that while mixed ownership strategies hold potential, their success in Mongolia requires robust governance frameworks and improved stock market prerequisites. The findings contribute to the literature on fiscal risk management and SOE reforms in resource-dependent developing economies, offering actionable insights for policymakers and a framework for sustainable public finance strategies. JEL codes: L32, H63, H83