Ownership changes and access to external financing

Anzhela Knyazeva, Diana Knyazeva and Joseph Stiglitz

Journal of Banking & Finance, 2009, vol. 33, issue 10, pages 1804-1816

Abstract: 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 (search for similar items in EconPapers)
Date: 2009

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Persistent link: http://EconPapers.repec.org/RePEc:eee:jbfina:v:33:y:2009:i:10:p:1804-1816

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