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Reluctant regulation

Listed author(s):
  • Bortolotti, Bernardo
  • Cambini, Carlo
  • Rondi, Laura

We study the effect of state ownership on the market-to-book ratios of publicly traded European utilities from 1994 to 2005. We find that when the company is subject to independent regulation, state ownership seems positively associated with firm value. This relation tends to appear in countries where weak checks and balances and political fragmentation do not constrain the power of the executive. Our results suggest that, where political institutions are weak, politicians may influence regulatory agencies in order to benefit state-owned firms.

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File URL: http://www.sciencedirect.com/science/article/pii/S0147596712000935
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Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 41 (2013)
Issue (Month): 3 ()
Pages: 804-828

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Handle: RePEc:eee:jcecon:v:41:y:2013:i:3:p:804-828
DOI: 10.1016/j.jce.2012.12.003
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622864

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