Development vs. political views of government ownership: How does it affect investment efficiency?
Document Type
Article
Publication Date
8-1-2022
Abstract
This study connects the development view and political view of government ownership with the firm life cycle theory to explain firms' investment efficiency. We find that government ownership of firms in the introduction and decline stages is driven by the development view that improves investment efficiency. However, consistent with the political view, higher government ownership worsens firms' investment efficiency in the growth and mature stages. For firms in these two stages, we also find a significant threshold effect of government ownership on investment efficiency. Our results imply that the government's participation objective is different based on the firms' development stages.
Keywords
Government ownership, Investment efficiency, Firm life cycle, Development view, Political view
Divisions
finance
Funders
None
Publication Title
Finance Research Letters
Volume
48
Publisher
Elsevier
Publisher Location
525 B ST, STE 1900, SAN DIEGO, CA 92101-4495 USA