Skip to main content Accessibility help
×
Hostname: page-component-78c5997874-s2hrs Total loading time: 0 Render date: 2024-11-05T11:56:36.336Z Has data issue: false hasContentIssue false

9 - State-owned enterprises in the world economy: the case of iron ore

Published online by Cambridge University Press:  04 August 2010

Get access

Summary

Only two or three decades ago, international trade was overwhelmingly in the hands of private firms. Today, however, state-owned enterprises hold a strong position in most raw materials, as well as some manufactured products; and the prospects are that this position may grow.

This chapter examines an industry in which state-owned enterprises have greatly enlarged their role in recent years, the world iron-ore industry. The chapter points to a number of conclusions about the effects of state-owned enterprises in international markets. Some conclusions may prove unique for the iron-ore industry, but others promise to apply more widely.

In industries such as iron-ore mining, where the fixed costs are high and where participants are limited in number, individual firms characteristically place considerable emphasis upon strategies that are designed to reduce their market risks. Until the 1970s, large private enterprises in these industries commonly tried to reduce such risks by creating vertically integrated linkages between mine and mill – that is to say, by internalizing the market for iron ore.

When state-owned enterprises became a major factor in the industry in the 1970s, the strategy of linking mines to mills continued to be prevalent wherever both could be located within the same national territory, but vertical integration across national borders became less common. Instead, state-owned enterprises sought other ways to achieve stability in international markets. How successful have they been in reducing the risks and uncertainties of these markets? What has been their effect on the structure of the international market itself? To answer these questions it is necessary first to review some key aspects of the changing structure of the industry.

Type
Chapter
Information
Publisher: Cambridge University Press
Print publication year: 1982

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Save book to Kindle

To save this book to your Kindle, first ensure [email protected] is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×