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Oligarchs, political regime changes, and firm valuation1

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  • Benjamin Maury
  • Eva Liljeblom

Abstract

This paper examines the impact of a regime shift on the valuation of politically powerful oligarch firms. Focusing on the Yeltsin–Putin regime shift in Russia, we find that the valuations of oligarch‐controlled firms are significantly higher under the Putin regime than under the Yeltsin regime after controlling for industry and time effects. The findings suggest that the increasing cost of extracting private benefits outweighs the reduction in the value of political connections following the political regime change. The results are also consistent with changes in the risk of state expropriation. Our results indicate that effects driven by the political regime change complement the traditional view that increased ownership concentration improved the performance of Russian oligarch firms.

Suggested Citation

  • Benjamin Maury & Eva Liljeblom, 2009. "Oligarchs, political regime changes, and firm valuation1," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(3), pages 411-438, July.
    • Handle: RePEc:bla:etrans:v:17:y:2009:i:3:p:411-438
    DOI: 10.1111/j.1468-0351.2009.00359.x
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    Cited by:

    1. Ichiro Iwasaki & Satoshi Mizobata & Alexander Muravyev, 2018. "Ownership dynamics and firm performance in an emerging economy: a meta-analysis of the Russian literature," Post-Communist Economies, Taylor & Francis Journals, vol. 30(3), pages 290-333, May.
    2. Ichiro IWASAKI & Satoshi MIZOBATA, 2018. "Post-Privatization Ownership And Firm Performance: A Large Meta-Analysis Of The Transition Literature," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 89(2), pages 263-322, June.
    3. Salla Pöyry & Benjamin Maury, 2010. "Influential ownership and capital structure," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 31(5), pages 311-324.
    4. Ichiro Iwasaki & Satoshi Mizobata, 2020. "Ownership Concentration and Firm Performance in European Emerging Economies: A Meta-Analysis," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 56(1), pages 32-67, January.
    5. Zadorozhna Olha & Zaderey Natalia, 2013. "Impact of Political Regime Shift on Stock Returns of Oligarch Firms," EERC Working Paper Series 13/06e, EERC Research Network, Russia and CIS.
    6. Demid Chernenko, 2019. "Capital structure and oligarch ownership," Economic Change and Restructuring, Springer, vol. 52(4), pages 383-411, November.

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