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Journal of Corporate Finance Vol. 42 2017

The value of government ownership during the global financial crisis

Christof Beuselinck1; Lihong Cao2,3,4; Marc Deloof2,4; Xinping Xia5

1 Institut d'Economie Scientifique Et de Gestion · 2 University of Antwerp · 3 Hunan University · 4 Antwerp Management School · 5 Huazhong University of Science and Technology

Abstract

This paper examines the value of government ownership in Europe during the global financial crisis. This crisis was an exogenous shock for European firms, which allows us to observe an out-of-equilibrium effect on the costs and benefits of government ownership. Using a comprehensive sample of 4737 listed firms in 28 European countries over the period 2005–2009, we find that firms with government ownership experienced a smaller reduction in firm value than firms without government ownership. This effect was driven by firms located in countries where the risk of expropriation by the government is lower, that is, countries with less corruption and better investor protection.

DOI
10.1016/j.jcorpfin.2015.05.002
Volume
42
Pages
481-493
Language
en
Sources
bibtex:phds-export.bib crossref openalex

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