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The value of government ownership during the global financial crisis

Listed author(s):
  • Beuselinck, Christof
  • Cao, Lihong
  • Deloof, Marc
  • Xia, Xinping

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.

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File URL: http://www.sciencedirect.com/science/article/pii/S0929119915000553
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Article provided by Elsevier in its journal Journal of Corporate Finance.

Volume (Year): 42 (2017)
Issue (Month): C ()
Pages: 481-493

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Handle: RePEc:eee:corfin:v:42:y:2017:i:c:p:481-493
DOI: 10.1016/j.jcorpfin.2015.05.002
Contact details of provider: Web page: http://www.elsevier.com/locate/jcorpfin

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