The Role of State and Foreign Owners in Corporate Risk-Taking: Evidence from Privatization
Speaker
Abstract
| Using a unique database of 190 newly privatized firms from 36 countries, we investigate the impact of shareholders’ identity on corporate risk-taking behavior. We find strong and robust evidence that state (foreign) ownership is negatively (positively) related to corporate risk-taking. Moreover, we find that the high risk-taking by the foreign owners depends on the country-level governance institutions. Our results suggest that relinquishment of government control, openness to foreign investment, and improvement of country-level governance institutions are key factors in the corporate risk-taking behavior. |
| Download Saffar's paper |
| Contact information: |
| Sebastian Gryglewicz |
| The Brown Bag Seminars are sponsored by ERIM. |
| www.eur.nl/financegroup |
