Disinvestment, lending relationships and executive compensation: Evidence from the Indian experience

Saibal Ghosh

MPRA Paper from University Library of Munich, Germany

Abstract: The analysis employs data on federal Government-owned public enterprises (PSEs) since the 1980s that encompasses the partial privatization program to examine the likelihood of privatization. The results indicate that employment-intensive, high-paying but less profitable firms are more likely to be privatized. In terms of lending relationships, the analysis indicates that private banks are the main bank for small firms and foreign banks are the main bank for large, established firms. State-owned banks are more likely to be associated with leveraged PSEs as compared to other bank groups. In terms of compensation policies in PSEs, the evidence testifies that bigger, established and leveraged PSE firms pay higher salaries.

Keywords: Partial privatization; public enterprises; relationship lending; executive compensation; India (search for similar items in EconPapers)
JEL-codes: J33 L33 (search for similar items in EconPapers)
Date: 2010
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Published in Global Business Review 2.12(2011): pp. 213-235

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