Government Investment in Publicly Traded Firms

60 Pages Posted: 12 Mar 2018 Last revised: 21 Nov 2018

See all articles by Kateryna V. Holland

Kateryna V. Holland

University of Missouri - Trulaske College of Business

Date Written: November 14, 2018


I examine shareholder wealth effects associated with different types of government investors in an international sample. I develop a taxonomy to identify government political, financial, and industrial arms. State investments, similar in dollar amount to state privatizations, have increased target shareholder wealth by over USD 50 billion. But market participants differentiate among government entities as target shareholders lose over USD 14 billion, when the investment is announced by the political arms of government rather than the industrial or the financial arms. The apparent intent of government agency is considered by private investors. Post-investment performance tests, institutional environment analysis, and access to credit tests corroborate this.

Keywords: Government Investment, Government Ownership, Government-Controlled Corporations, State-Owned Enterprises, Sovereign Wealth Funds

JEL Classification: G32, G38, L33

Suggested Citation

Holland, Kateryna V., Government Investment in Publicly Traded Firms (November 14, 2018). Available at SSRN: or

Kateryna V. Holland (Contact Author)

University of Missouri - Trulaske College of Business ( email )

Robert J. Trulaske, Sr. College of Business
403 Cornell Hall
Columbia, MO 65211
United States

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