Establishment of a state-owned company may be justified by the case of public goods. Provision of such goods has to be in the hands of the government because if it were to be left in the hands of the private sector, there might be exploitation of consumers. Another reason that might justify the establishment of state-owned companies is that it enables the government to have total control of the country's economy. State-companies are also established so that the government can provide goods and services that the private sector might be unable to provide due to the long periods such ventures may take before they start making profit or high cost of starting such ventures.
