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

Purdue University - Division of Finance

Date Written: November 14, 2018

Abstract

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: https://ssrn.com/abstract=3138274 or http://dx.doi.org/10.2139/ssrn.3138274

Kateryna V. Holland (Contact Author)

Purdue University - Division of Finance ( email )

MGMT KRAN, 403 West State Street
West Lafayette, IN 47907-2056
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
43
Abstract Views
547
PlumX Metrics