Archivio Istituzionale della RicercaWe 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 is positively associated with firm value. This effect is strong and significant 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 influence regulatory agencies in order to benefit state-owned firms.
Reluctant Regulation / Bortolotti, B.; Cambini, Carlo; Rondi, Laura. - In: JOURNAL OF COMPARATIVE ECONOMICS. - ISSN 0147-5967. - 41:(2013), pp. 804-828. [10.1016/j.jce.2012.12.003]
Reluctant Regulation
CAMBINI, CARLO;RONDI, LAURA
2013
Abstract
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 is positively associated with firm value. This effect is strong and significant 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 influence regulatory agencies in order to benefit state-owned firms.
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https://hdl.handle.net/11583/2503523
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