Posted: 23 Jul 2008 Last revised: 30 Aug 2011
Date Written: December 29, 2008
This paper examines access to external financing in the privatization context and provides new evidence on the effects of financing constraints on performance and investment. Ownership reforms increase firms’ reliance on external financing. Empirically, performance and investment changes around ownership reforms are increasing in country-level measures of access to credit. The presence of a severe prior public financing constraint contributes to stronger investment growth after privatization. Privatized enterprises do not outperform publicly owned industries, all else given. Our analyses rely on new international sector- and firm-level data and correct for potential endogeneity of ownership changes.
Keywords: Privatization, Ownership, Access to credit, Performance, Investment
JEL Classification: G38, G31, L33
Suggested Citation: Suggested Citation
Knyazeva, Anzhela and Knyazeva, Diana and Stiglitz, Joseph E., Ownership Changes and Access to External Financing (December 29, 2008). Journal of Banking and Finance, Vol. 33, No. 10, pp. 1804-1816, 2009. Available at SSRN: https://ssrn.com/abstract=1170543