Responding to Financial Crisis: The Rise of State Ownership and Implications for Firm Performance
We examine changes to corporate ownership in nine East Asian countries following the 1997 Asian Financial Crisis. Countries with lower incomes and in which policy making involves greater transactions costs (i.e., veto points) have more firms with state ownership. Partial state ownership appears to be effective insurance against crisis. Firms with minority state ownership exhibit 5% (annualized) lower idiosyncratic volatility in the quarter of the Lehman Brothers collapse than firms with either no or dominant state ownership. Minority state-owned firms also enjoy a higher abnormal return of 3.7% and 6.1% in the two quarters following the collapse of Lehman Brothers.
|Date of creation:||26 Oct 2012|
|Date of revision:|
|Contact details of provider:|| Postal: |
Web page: http://mpra.ub.uni-muenchen.de
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Stijn Claessens & Luc Laeven & Deniz Igan & Giovanni Dell'Ariccia, 2010. "Lessons and Policy Implications From the Global Financial Crisis," IMF Working Papers 10/44, International Monetary Fund.
- Rafael La Porta & Florencio Lopez-de-Silane, 1997.
"The Benefits of Privatization: Evidence from Mexico,"
NBER Working Papers
6215, National Bureau of Economic Research, Inc.
- Rafael La Porta & Florencio López-De-Silanes, 1999. "The Benefits Of Privatization: Evidence From Mexico," The Quarterly Journal of Economics, MIT Press, vol. 114(4), pages 1193-1242, November.
- Rafael La Porta & Florencio López-de-Silanes, 1997. "The Benefits of Privatization : Evidence from Mexico," World Bank Other Operational Studies 11583, The World Bank.
- Meyer, Klaus E., 2002. "Management challenges in privatization acquisitions in transition economies," Journal of World Business, Elsevier, vol. 37(4), pages 266-276, January.
- Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-29, May.
- Johnson, Simon & Mitton, Todd, 2003.
"Cronyism and capital controls: evidence from Malaysia,"
Journal of Financial Economics,
Elsevier, vol. 67(2), pages 351-382, February.
- Simon Johnson & Todd Mitton, 2001. "Cronyism and Capital Controls: Evidence from Malaysia," NBER Working Papers 8521, National Bureau of Economic Research, Inc.
- Randall Morck & Andrei Shleifer & Robert W. Vishny, 1989.
"Do Managerial Objectives Drive Bad Acquisitions?,"
NBER Working Papers
3000, National Bureau of Economic Research, Inc.
- Boardman, Anthony E & Vining, Aidan R, 1989. "Ownership and Performance in Competitive Environments: A Comparison of the Performance of Private, Mixed, and State-Owned Enterprises," Journal of Law and Economics, University of Chicago Press, vol. 32(1), pages 1-33, April.
- Nandini Gupta, 2005. "Partial Privatization and Firm Performance," Journal of Finance, American Finance Association, vol. 60(2), pages 987-1015, 04.
- Paul H. Malatesta & Kathryn L. DeWenter, 2001. "State-Owned and Privately Owned Firms: An Empirical Analysis of Profitability, Leverage, and Labor Intensity," American Economic Review, American Economic Association, vol. 91(1), pages 320-334, March.
- Michael L. Lemmon & Karl V. Lins, 2003. "Ownership Structure, Corporate Governance, and Firm Value: Evidence from the East Asian Financial Crisis," Journal of Finance, American Finance Association, vol. 58(4), pages 1445-1468, 08.
- Anderson, James H & Lee, Young & Murrell, Peter, 2000. "Competition and Privatization Amidst Weak Institutions: Evidence from Mongolia," Economic Inquiry, Western Economic Association International, vol. 38(4), pages 527-49, October.
- Fama, Eugene F. & French, Kenneth R., 1993. "Common risk factors in the returns on stocks and bonds," Journal of Financial Economics, Elsevier, vol. 33(1), pages 3-56, February.
- Karl V. Lins & Paolo Volpin & Hannes F. Wagner, 2013. "Does Family Control Matter? International Evidence from the 2008--2009 Financial Crisis," Review of Financial Studies, Society for Financial Studies, vol. 26(10), pages 2583-2619.
- Fabian Valencia & Luc Laeven, 2012. "Systemic Banking Crises Database: An Update," IMF Working Papers 12/163, International Monetary Fund.
- North, Douglass C. & Weingast, Barry R., 1989. "Constitutions and Commitment: The Evolution of Institutions Governing Public Choice in Seventeenth-Century England," The Journal of Economic History, Cambridge University Press, vol. 49(04), pages 803-832, December.
- Simon Johnson & Peter Boone & Alasdair Breach & Eric Friedman, 1999.
"Corporate Governance in the Asian Financial Crisis,"
William Davidson Institute Working Papers Series
297, William Davidson Institute at the University of Michigan.
- Johnson, Simon & Boone, Peter & Breach, Alasdair & Friedman, Eric, 2000. "Corporate governance in the Asian financial crisis," Journal of Financial Economics, Elsevier, vol. 58(1-2), pages 141-186.
- Eric Friedman & Simon Johnson & Peter Boone & Alasdair Breach, 1999. "Corporate Governance in the Asian Financial Crisis," Departmental Working Papers 199920, Rutgers University, Department of Economics.
- Majumdar, Sumit K, 1998. " Assessing Comparative Efficiency of the State-Owned Mixed and Private Sectors in Indian Industry," Public Choice, Springer, vol. 96(1-2), pages 1-24, July.
- Chen, Gongmeng & Firth, Michael & Xu, Liping, 2009. "Does the type of ownership control matter? Evidence from China's listed companies," Journal of Banking & Finance, Elsevier, vol. 33(1), pages 171-181, January.
- Ehrlich, Isaac & Georges Gallais-Hamonno & Zhiqiang Liu & Randall Lutter, 1994. "Productivity Growth and Firm Ownership: An Analytical and Empirical Investigation," Journal of Political Economy, University of Chicago Press, vol. 102(5), pages 1006-38, October.
- Schaffer, Mark E., 1998. "Do Firms in Transition Economies Have Soft Budget Constraints? A Reconsideration of Concepts and Evidence," Journal of Comparative Economics, Elsevier, vol. 26(1), pages 80-103, March.
- Wu, Hsueh-Liang, 2011. "Can minority state ownership influence firm value? Universal and contingency views of its governance effects," Journal of Business Research, Elsevier, vol. 64(8), pages 839-845, August.
- Elton, Edwin J & Gruber, Martin J & Blake, Christopher R, 1996. "Survivorship Bias and Mutual Fund Performance," Review of Financial Studies, Society for Financial Studies, vol. 9(4), pages 1097-1120.
- Shleifer, Andrei & Vishny, Robert W, 1994. "Politicians and Firms," The Quarterly Journal of Economics, MIT Press, vol. 109(4), pages 995-1025, November.
- Cornett, Marcia Millon & Guo, Lin & Khaksari, Shahriar & Tehranian, Hassan, 2010. "The impact of state ownership on performance differences in privately-owned versus state-owned banks: An international comparison," Journal of Financial Intermediation, Elsevier, vol. 19(1), pages 74-94, January.
- W. J. Henisz, 2000. "The Institutional Environment for Economic Growth," Economics and Politics, Wiley Blackwell, vol. 12(1), pages 1-31, 03.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:43600. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht)
If references are entirely missing, you can add them using this form.