Government Ownership, Financial Constraint, Corruption, and Corporate Performance: International Evidence

37 Pages Posted: 20 Nov 2017

See all articles by Zulfiquer Ali Haider

Zulfiquer Ali Haider

University of Manitoba - Department of Business Administration

Mingzhi Liu

University of Manitoba - Asper School of Business

Yefeng Wang

University of Manitoba - Department of Business Administration

Ying Zhang

University of Manitoba - Department of Accounting and Finance

Date Written: June 1, 2017

Abstract

Using a sample of 8,232 firms from 81 countries, we investigate the effect of government ownership on financial constraint and the effect of financial constraint on corporate performance. In addition, we address the moderating role of country-level corruption on those two relationships. Results show that government-owned firms face fewer financial constraints and that firms with fewer financial constraints perform better. Furthermore, we find that the association between government ownership and financial constraint and the association between financial constraint and corporate performance are less pronounced for firms operating in countries with a lower level of corruption.

Keywords: Government Ownership; Financial Constraint; Corruption; Performance

JEL Classification: G14; G30

Suggested Citation

Haider, Zulfiquer Ali and Liu, Mingzhi and Wang, Yefeng and Zhang, Ying, Government Ownership, Financial Constraint, Corruption, and Corporate Performance: International Evidence (June 1, 2017). Journal of International Financial Markets, Institutions and Money, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3072609

Zulfiquer Ali Haider

University of Manitoba - Department of Business Administration ( email )

Winnipeg, Manitoba R3T 5V4
Canada

Mingzhi Liu (Contact Author)

University of Manitoba - Asper School of Business ( email )

460-181 Freedman Crescent
Winnipeg, Manitoba R3T 5V5
Canada
204-474-6847 (Phone)

HOME PAGE: http://umanitoba.ca/faculties/management/faculty_staff/academic_professors/mingzhi-liu.html

Yefeng Wang

University of Manitoba - Department of Business Administration ( email )

Winnipeg, Manitoba R3T 5V4
Canada

Ying Zhang

University of Manitoba - Department of Accounting and Finance ( email )

Faculty of Management
Winnipeg, MB R3T 5V4
Canada

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