Profit or politics? Understanding renationalizations in Russia
AbstractThis study examines firm-level determinants of the government incentives to acquire controlling stakes in private companies. Using a novel hand-collected dataset of 153 largest listed and unlisted Russian companies, I investigate the methods and the rationales of a 2004–2008 wave of selected nationalizations in a post-privatization market. I find robust evidence that formerly privatized and domestically-owned companies in strategically important sectors face the highest risks of corporate control transfers from private to state hands. I also find that the corporate tax evasion is another significant determinant of a firm nationalization. Contrary to commonly held beliefs, there is little evidence that renationalizations in Russia are driven by firm profitability factors: the government neither systematically “cherry-picks” best performers nor addresses market failures by rescuing national champions in financial distress. These results contribute to t'he politics and finance literature by providing new firm-level evidence on the importance of strategic nationalism in the government's decision to intervene into the corporate control structures.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Corporate Finance.
Volume (Year): 17 (2011)
Issue (Month): 5 ()
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Web page: http://www.elsevier.com/locate/jcorpfin
Nationalization; Political economy; National champions; Strategic sectors; Russia;
Find related papers by JEL classification:
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- P26 - Economic Systems - - Socialist Systems and Transition Economies - - - Political Economy
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- Victor DRAGOTA & Carmen LIPARA & Radu CIOBANU, 2013. "Agency Problems and Synergistic Effects in Romania: The Determinants of the Control Premium," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 63(2), pages 197-219, May.
- Tsatsos, Aristidis, 2012.
"Die Liberalisierung des russischen Gassektors: 3 Szenarios?
[The liberalisation of the Russian gas sector: 3 scenarios?]," MPRA Paper 44623, University Library of Munich, Germany.
- Alexeev, Michael & Weber, Shlomo (ed.), 2013. "The Oxford Handbook of the Russian Economy," OUP Catalogue, Oxford University Press, number 9780199759927.
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